August 30, 2009
Hong Kong is known for its skyscrapers, but even by Hong Kong standards the new International Commerce Center is massive! And, even with the economic downturn, the building is almost fully tenanted. Is this a testament to the world’s hottest property market, or is it a simple case of low levels of supply coupled with demand?
The building is 490 meters (1,608 feet) tall, and is now the tallest building in Hong Kong. Yup. 490m, with 118 stories (FYI, it has 83 elevators)!
What’s bigger than the ICC? Well, it is the fourth largest tower in the world, following the almost completed Burj Dubai in Dubai, Taipei 101 in the Taiwanese capital and the Shanghai World Financial Center.
According the Sun Hung Kai Properties (the developer) the project is almost completely leased. By who? Anchoring the building is Morgan Stanley and Credit Suisse. Deutsche Bank has 12 floors, and the top 16 floors will be inhabited by The Ritz!
These were locked in between 2007 and 2008, while rents were still surging. According to the article Despite Slump, Hong Kong Real Estate Remains Strong in the New York Times, “the financial crisis meant that banks needed to find ways to save, and moving across Victoria Harbor from the central business district was attractive.”
How have they succeeded in almost filling the building with tenants? According to the article, “This is because there is simply nowhere to put new buildings. Central, sandwiched between Hong Kong’s harbor and the steep hills in the island’s center, has for years had virtually nowhere to grow but up, sprouting ever taller buildings.” Couple this with the fact that “there is very little other new office space coming onto the market.”
Seems like the perfect timing for the ICC. Real estate agents estimate rents on the I.C.C. side of the harbor have been much lower than in Central. As an example, average rents in the International Finance Center are estimated at about twice those in the I.C.C.
The I.C.C., is due to be completed next year.