Hongkong Land eyes further growth in Singapore, Indonesia
Dated: June 14, 2011
Hongkong Land, the biggest landlord in Hong Kong’s central district and a part of the Jardine Matheson Group, said upside for office rentals in the city centre was limited as already sky-high rents could force companies to relocate to more affordable areas.
However, a report last week by real estate agency Savills said that it expected office rents in the heart of Hong Kong will rise as much as 55 per cent this and next year combined. Non-core districts will see office rents rise by 40 per cent during the same period.
Hong Kong has replaced London as the most expensive office location in the world, DTZ said, with rents for prime office space going at US$1,877 (RM5,690) per square metre a year, compared to US$952 per square metre a year in Singapore.
“We will still continue to see a little bit of upside but it becomes a question of affordability,” Robert Garman, an executive director at Hongkong Land said in an interview.
As a result, Hongkong Land is seeking to expand more in overseas countries such as Singapore, where the government has been more aggressive in reclaiming land around its central business district.
“Singapore is a very key market and in the future you’re going to see a lot more growth here because you’ve got a large reservoir of land that the government has created to sustain that growth,” Garman said.
He added that he expects Singapore’s office sector to see more rental upside over the next 12-18 months as compared to Hong Kong, fuelled by strong demand from the financial services and commodities sectors.
“Rents in Singapore are still relatively inexpensive compared to Hong Kong so people will look to future growth here. There’s also more availability of good quality office in Singapore, and that’s why we’re more keen on expanding here,” Garman said.
In Singapore, Hongkong Land owns stakes in developments such as the Marina Bay Financial Centre and One Raffles Quay, which it jointly developed with Keppel Land and Cheung Kong.
About 15-20 per cent of Hongkong Land’s total gross asset value comes from its Singapore properties, but Garman said he expects this to increase in the coming years.
It has about 1.3 million square feet of completed properties in Singapore and another 400,000 square feet of upcoming office space next year.
After Hongkong Land launches the third tower at Marina Bay Financial Centre in April, it will have no further commercial projects in its pipeline but it plans to acquire more land that are in close proximity to its existing developments in Singapore’s central business district, said Garman.
However, he did not rule out developing offices outside of Singapore’s downtown area if their existing tenants, such as banks, require more office space in non-prime areas for back-end services.
Besides Singapore, Hongkong Land is also planning to develop more sites in Jakarta, Indonesia, as demand for office space is expected to grow with the country’s booming oil and gas and commodities industries.
“Indonesia’s market has picked up significantly, so we’d like to expand our business there,” said Garman.
Hongkong Land has acquired a 50 per cent stake in Jakarta Land, which owns 800,000 square feet of prime office space in the city’s central business district.
“I see all the sectors there expanding. In the field of oil and gas and commodities, we’re seeing quite a large amount of growth. We’re also seeing local banks improving their accommodation in Jakarta,” Garman added. – Reuters
Back to Main Page: www.VulcanInternational.blogspot.com
No comments:
Post a Comment