A third CBD will be created to relieve Central and Kowloon East.
The government’s masterplan to add about 1,700 hectares by reclaiming the area near Kau Yi Chau and Hei Ling Chau to the east of Lantau Island is expected to provide the necessary relief to an office sector that's just about ready to burst at the seams.
Early development plans under the ‘Lantau Tomorrow Vision’ allocate around 100 hectares for the establishment of a third CBD, according to real estate consultant JLL.
The third CBD aspirant aims provide about 43 million sq ft of commercial floor space in an effort to decongest Hong Kong’s two other CBDs. In comparison, the Central CBD covers a mere 170 hectares whilst Kowloon East CBD coves only 488.
Over the last 20 years, Grade A office stock has grown by 1.3 million sqft annually but net absorption has averaged at around 1.5 million sq ft per year, representing a shortfall of around 200,000 sq ft.
“Given Hong Kong’s limited resources, there is a real need for long-term planning to ensure that the city can continue to sustain economic growth to provide good jobs and maintain high living standards to its inhabitants whilst remaining attractive to investors and visitors,” Lau Chun-kong, Head of Valuations & Advisory Services at JLL in Greater China and Asia, said in a statement.
However, the Lantau reclamation plan is a long-term development plan spanning decades as it brings to mind Singapore’s Marina Bay where land reclamation started in 1970’s but only in 1992 was the first detailed land use plan exhibited.
The government is estimated to have enough land that can deliver about 10 years worth of commercial office supply at around 20.1 million sq ft, data from JLL show, a growing issue which raises concerns about the economy’s attractiveness and competitiveness as a leading headquarters for multinational corporations.
“The Government needs to ramp up land supply for commercial office development if it is to ensure that Hong Kong continues to have room for businesses to grow and be competitive,” Joseph Tsang, managing director at JLL said in an earlier report.
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