“Lantau Tomorrow Vision” Allows for More Commercial Office Supply
Strengthen Hong Kong’s Long-term Competitiveness as Regional Business Hub
HONG KONG, 13 November 2018 – According to JLL's Commercial Land Supply research report published in September, the Government currently only has enough land to deliver about 10 years of commercial office supply. With the city already experiencing a shortage of office space, JLL believes the Government's "Lantau Tomorrow Vision" proposal is one of the approaches that can address this situation over the longer-term.
The Government plans to add a total area about 1,700 hectares through reclamation near Kau Yi Chau and Hei Ling Chau in the waters to the east of Lantau Island. Early development parameters include allocating over 100 hectares to establish a third CBD for the city, providing about 43 million square feet of commercial floor space. In comparison, the Central CBD covers just over 170 hectares while CBD2 in Kowloon East covers 488 hectares of land area.
The Lantau Tomorrow Vision is a development plan that spans decades and will take a considerable amount of time to realise. Taking Marina Bay in Singapore as an example, land reclamation started in the 1970s and it wasn't until 1992 that the first detailed land use plan was exhibited. According to our Government, the first phase of reclamation will focus on studies for developing artificial islands of about 1,000 hectares near Kau Yi Chau and the remaining artificial islands of about 700 hectares will be subject to longer-term planning.
Lau Chun-kong, Head of Valuations & Advisory Services at JLL in Greater China and Asia, said, "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. With increasing regional competition, it is paramount that the Government has sufficient land to maintain our economic competitiveness well into the future."
Denis Ma, Head of Research at JLL, said, "Our data shows that as at the end of 3Q18, Grade A office rents in Hong Kong were significantly higher than other major cities in Asia Pacific with limited supply being a key contributing factor (Figures 1 & 2). If this situation is not addressed, Hong Kong will lose its appeal as a business hub as companies migrate or implement regional growth strategies in neighboring cities/countries that have a greater real estate offering."
By adding another 43 million sq ft of commercial space to the city's long-term development plan, which is equivalent to about 83% of Central and 57% of CBD2 that the government plans to build out to, Hong Kong will be in a stronger position to safeguard its status as regional business hub as well as allowing room for the economy to grow and its inhabitants to prosper.
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