Ginza-style buildings: Adapting to changing market demands

Capturing the demand for Ginza-style commercial space is not just the “right” of existing buildings—this can apply to new buildings.

In recent years, working patterns have changed significantly, prompting office occupiers to demand different types of workspace other than traditional “office,” and the knock on effect for landlords to  provide more inclusive space to accommodate their needs.

This shift, coupled with the looming office supply, is reshaping the office market in Hong Kong.

Whilst the general Grade A Commercial office market is sluggish, if we dig deeper inside the demand for commercial space from the retail startups and small businesses founded by younger generation entrepreneurs, remains strong.

In view of all these changes, landlords of commercial properties have started rethinking their leasing strategy–some decided to convert parts of their vacant units to fit for semi-retail tenants. Some purposely built Ginza-style buildings or structures that suit specific trades, such as medical and healthcare, food & beverage, and education.

Ginza-style commercial buildings are typically located in retail districts such as Causeway Bay and Tsim Sha Tsui. These areas usually have a high density of shopping malls, entertainment venues, and offices that primarily cater to retail activities.  

Recently, a portfolio landlord in Causeway Bay has refurbished a floor of approximately 10,000 sq. ft. in a traditional office building. The new design includes a refreshed corridor design, full-height glass panel shopfronts, flexible air-conditioning supply hours and the flexibility to subdivide spaces from 800 sq. ft. to accommodate various tenant mixes.

The landlord is even considering providing standard fitouts, such as design, partitions, lighting and furniture to help tenants save on upfront capital expenditure and construction time, allowing them to start their business operations as soon as they begin the lease.

Capturing the demand for Ginza-style commercial space is not just the “right” of existing buildings. This can apply to new buildings.

A local listed landlord has recently developed a brand-new Ginza-style building, which is right next to the Causeway Bay MTR station with open Happy Valley view. The floor plate is around 2,000 sq. ft. with column-free design, plus town gas, water in/outlet, extra ceiling height and independent air-conditioning supply which make it ideal for all kinds of retail activities, especially beauty centres and upscale gastronomic dining experience.

Last year, another landlord in Tsim Sha Tsui also purposely developed a building that caters to healthcare services with professional medical provisions and hassle-free accessibility design for patients and visitors with disabilities. With a typical floor plate of around 5,500 sq ft, sufficient stable power supply, high ceiling height and extra floor loading for some featured floors, this would accommodate the sizable medical equipment such as MRI and CT and other imaging machines.

Provisions such as fresh air exchange louvers, air purifiers, fresh water in and out that could accommodate the day-case surgery centre and other medical services requirements. The ample lift provision ensures accessibility for the medical tenant to transfer medical apparatus between floors.

The building can also help build an ecosystem for the medical services tenants and facilitate the patients and visitors to stay in the same building for all their medical needs.

The development of these Ginza-style buildings reflects the increasing demand for higher specification commercial space, including ceiling height, floor load, and sufficient power and water supply. Landlords who are in the development stage can consider offering specific provisions that cater to particular trades, enhancing the overall tenant experience and competitiveness of the building.

To conclude, the evolving commercial real estate market in Hong Kong presents both challenges and opportunities. By adapting to new workplace trends and catering to the specific needs of various trades, landlords can maximise the potential of their properties and meet the demands of a diverse tenant base.