High-quality commercial buildings in Causeway Bay aim to attract significant international clients, according to JLL.
Revitalizing Causeway Bay's Property Market: The Trophy Buildings' Appeal
Paul Yien, a seasoned agent with JLL for 25 years, believes that trophy buildings with expansive floor plates in Causeway Bay are set to captivate the market, attracting a broader spectrum of tenants.
Traditionally known for its shopping and dining hotspots, Causeway Bay might be transitioning into an office hub worth noting. Take the anticipated Lee Garden Eight, a collaboration between Hysan Development (Causeway Bay's leading commercial landlord) and the Chinachem Group. Scheduled to complete next year, the development boasts over a million sq ft of office space, with the largest floor plate on Hong Kong Island potentially reaching 38,000 sq ft.
Yien expresses confidence in Causeway Bay, stating its vibrant and bustling atmosphere, even on weekends, and its attractiveness to a diverse mix of tenants. JLL, the main agent for Lee Garden Eight, is backing the project.
"Causeway Bay is a veritable smorgasbord of business industries," Yien notes. "In Central, it's banking and finance that reign supreme, with hedge funds and private equity firms dominating. However, in Causeway Bay, you find a motley assortment of sectors: security firms, accountants, lawyers, tech companies, and more, clustering there."
The neighborhood's retail and dining options cater to all, from budget-friendly to high-end, Yien suggests.
It's worth mentioning that the office vacancy rate in Causeway Bay has been decreasing, suggesting increased absorption of available space, although rental rates from renewals continue to fall, albeit at a slower pace than anticipated in 2024. Office rents on Hong Kong Island, including Causeway Bay, are projected to decrease by up to 3% in 2025. Despite downward rental pressure, Causeway Bay, along with Wan Chai, indicates greater resilience in comparison to other districts on Hong Kong Island.
Trophy buildings like Lee Garden Eight enrich the premium end of the market, drawing high-profile tenants, especially from the finance sector and mainland Chinese companies, which are currently key drivers of leasing demand. These buildings help maintain Causeway Bay's competitive edge in terms of office quality and amenities, thus supporting occupancy levels even as the overall office market experiences softness.
In summary, the office market in Causeway Bay is observing a moderate recovery phase with improving vacancy rates and decreasing rental declines. Trophy buildings like Lee Garden Eight play a significant role in sustaining demand and rental resilience by drawing in quality tenants amidst a cautious leasing environment. The outlook for 2025 remains cautious yet steady, with rental declines forecast to be minimal, and the market eagerly awaiting new supply such as One Causeway Bay to potentially stimulate further activity.
- Trophy buildings in Causeway Bay, such as Lee Garden Eight, are expected to entice a variety of tenants from different sectors, including finance, technology, and real-estate, due to their expansive floor plates and premium quality.
- The anticipated Lee Garden Eight, a joint development between Hysan Development and Chinachem Group, will offer over a million square feet of office space, making it an attractive investment for finance-oriented businesses looking to establish a presence in Causeway Bay.
- With commercial landlords like Hysan Development leading the way, Causeway Bay is becoming a notable office hub, catering to various industries that find its vibrant atmosphere conducive to business, such as tech companies, accountants, lawyers, and security firms.
