Jardine Matheson on Monday gave a vote of confidence to Hong Kong and its commercial `property market, announcing plans for a US$ 300m redevelopment of Swire House, one of its prime Hong Kong property assets.
The proposed development will be one of the biggest investments in the territory by Hongkong Land, the property arm of the UK-controlled conglomerate. It reinforces the groups optimistic assessment of business prospects after the transfer of sovereignty in July and follows last weeks announcement of its first foray into Chinas residential property market.
Percy Weatherall, managing director of Hongkong Land, said: The time is right for Hongkong Land to maximise the value of its oldest property in Hong Kong. The company played down concerns about the increased supply in the central business district, arguing that demand would be sufficient.
If you believe, as we do, that there will be strong economic growth in China and Hong Kong then there should not be oversupply, said Robert Wong, executive director. He predicted that an average supply of about 4.5m sq ft of grade A office space over the next three years would be absorbed before completion of the Swire House redevelopment.
Under Hongkong Lands proposals, redevelopment of the 35-year-old property will start in October next year. Completion is expected in 2003.
The new building will have a net floorspace of 493,000 sq ft, comprising a 30-storey office tower above a three-level podium and a three-level basement. It will provide 474,000 sq ft of office space, with retail areas taking up the balance. The building will also have 110 parking spaces.
The largest current tenant of Swire House is Cathay Pacific, the airline that is the territorys de facto flag carrier. It is jointly controlled by Britains Swire group, and Citic Pacific, the Hong Kong arm of Beijings flagship investment vehicle. According to Hongkong Land, Cathay Pacific will relocate its head office to Chek Lap Kok, the territorys new airport, which is scheduled for completion next spring.
The announcement of the redevelopment, following news of the US$ 100m mainland joint venture residential project, signals increased activity at Hongkong Land. The group is one of Hong Kongs biggest landlords, owning and managing some 5m sq ft of office and retail space in the central business district.
The proposed development will be one of the biggest investments in the territory by Hongkong Land, the property arm of the UK-controlled conglomerate