West Kowloon district emerging as new darling of Hong Kong-based multinational tenants
- The area is set to see new office buildings open in the next few years, including the West Kowloon Cultural District Authority (WKCDA) Tower
- Auction house Phillips has signed a deal to rent the main floors of the WKCDA Tower, next to the M+ art museum
The West Kowloon district is likely to become an important commercial district in Hong Kong in the coming years, as new office space comes onto the market, according to analysts.
“The Kowloon station precinct serves as an extension to the core Tsim Sha Tsui office submarket but currently has only limited amount of office space, so it isn’t seen as a stand-alone office submarket for the time being,” said Marcos Chan, head of research at real estate firm CBRE Hong Kong.
However, “the future offices and generous open space to be built within the West Kowloon Cultural District Authority (WKCDA) Tower will help strengthen the commercial atmosphere of the area and gradually build up the appeal of the Kowloon station precinct as a preferred office district”, Chan said.
The area is expected to attract financial companies and mainland enterprises upon the completion of the 16-storey WKCDA Tower, as well as a planned twin tower development with 2.6 million sq ft of office space and 603,000 sq ft of retail space atop the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) terminus, set to open between 2025 and 2026, Chan said.
The XRL terminus, the only station in Hong Kong linked to the wider high-speed railway network in China, as well as the Kowloon station, which connects to the Hong Kong International Airport via the Airport Express, are some of West Kowloon’s biggest draws. The XRL’s West Kowloon station is a seven-minute drive from the Tsim Sha Tsui MTR station and a 15-minute ride to Shenzhen.
At the moment, however, the ICC – the tallest building in Hong Kong and home to the outposts of several major Chinese and multinational financial institutions – is the only office block in proximity.
One company that is taking advantage of the rapidly developing area is Russian-owned auction house Phillips. It has signed on to rent a 48,000 sq ft space occupying the main floors of the WKCDA Tower to house its new Asian headquarters, which is eight times bigger than its current space at St. George’s building, according to Ingrid Hsu, public relations director for Asia at Phillips.
West Kowloon’s transport links and the opening this month of the M+ museum of contemporary art and design are some of the reasons behind Phillips’ decision to relocate to the area.
“Being located at the heart of the West Kowloon Cultural District will allow Phillips to work alongside M+, the Hong Kong Palace Museum and the wider district on complementary programming and events, further enhancing the area as a world-class global destination for arts and culture,” Hsu said.
Cheaper rents in the area compared to on Hong Kong Island are also likely to entice potential tenants. In November, office rents in Tsim Sha Tsui ranged between HK$41 (US$5.25) and HK$94 per square feet, while those on Hong Kong Island cost between HK$56 and HK$152 per square feet, according to CBRE.
