Businesses seeking convenience, flexibility, and leading ESG standards should consider the south of Hong Kong Island
While Hong Kong Island’s office market is still feeling the pandemic pain, Wong Chuk Hang (WCH) is relatively resilient regarding take-up. This section of the Southern Commercial Zone offered the most affordable rents, easy accessibility, F&B experiences, and new Grade A office space focused on the future, sustainability and wellbeing.
A former industrial epicentre, WCH has been reinventing itself, using old warehouses and other buildings to develop a vibrant arts scene. It has become a business incubator, attracting a swell of companies seeking spacious offices, and is part of a government campaign to boost Hong Kong Island’s south side.
The area is still a work in progress. Today, it is a significant part of the Invigorate Island South Initiative (IISI), mentioned in the 2020 Policy Address. The initiative intends to execute small changes that invigorate the area, such as improving pedestrian connectivity.
"WCH’s office market remains more resilient than other Island neighbourhoods, bar Island East."
Since March 2019’s overall peak rent and 2018’s net take-up, WCH’s office market remains more resilient than other Island neighbourhoods, bar Island East. Rent prices have eased from an average HK$38.4 net sq. ft. to HK$30.4 by October 22 this year, for a 20.8% drop, while the island’s average drop is 27.6%.
Office rental changes in Hong Kong Island – March 2019 vs October 2022
WCH is on the South Island MTR line, which links the Southern Commercial Zone to Admiralty in the CBD. The neighbourhood has two stations, the eponymous WCH at one end and Ocean Park at the other. From Admiralty, commuters can easily reach the rest of Hong Kong and Shenzhen.
Aberdeen Tunnel provides the motorway from WCH to Causeway Bay, and numerous parking facilities make driving to work easy. Public buses, light buses and taxis are easy to find.
As an up-and-coming suburb, WCH appeals to those who enjoy the sun, sea and sky against unspoiled green hills. Its waterfront provides access to water sport activities with promenades and dining options. It acts as a business incubator, attracting entrepreneurs who think outside the box, along with MNC occupiers.
F&B concepts born in Wong Chuk Hang
|Business||Established||Claim to fame|
|Africa Coffee & Tea||2020||Sustainably sourced African coffee and tea, where customers are encouraged to bring their own mugs. The company does not provide plastic straws and uses biodegradable utensils.|
|Altaya Wines||2001||A wine merchant providing a full range of services focused on boutique and foreign wines.|
|Butcher’s Club||2013||Successful dining concept with a focus on dry-aged beef.|
|Classified Group||2006||A collection of neighbourhood café-workspaces serving modern comfort food, fresh coffee and boutique wines.|
|Sensory Zero||2015||A specialist in exotic coffees and teas with several outlets across the city.|
|Young Master Brewery||2013||One of Asia’s top craft breweries that kicked off Hong Kong’s craze for artisan beer. Its WCH Brewery is the largest craft beer brewhouse in Hong Kong|
WCH has robust health and wellbeing activities, including a kid-friendly public swimming pool complex and gyms that suit everyone, from yoga to MMA. Ocean Park provides a rush of adrenaline and team-building opportunities, while Art Jam is more sedate, offering more than 2,000 sq. ft. for group activities.
While WCH is not as built up as more mature office areas, fashion icons such as Lane Crawford and i.t. have set up headquarters alongside pre-loved sustainable fashion brands Hula and Retykle. However, the district lacks big shopping malls, an issue that will soon be remedied.
Next year, The Southside lifestyle mall will open. It is connected to the MTR station, spans five retail floors of nearly 510,000 sq. ft. and is destined to become the largest experiential shopping mall in the Southern District. The mall and surrounding residential units will be a game changer for WCH, offering ample new dining and retail opportunities.
New Grade A Stock
From 2022 to 2026, there are major developments planned that will enter the market in WCH, accounting for 4.9% of Hong Kong’s overall new Grade A office supply.
Focussing on S22 by Empire Group, which is due to come online in early 2023, offers more than 160,000 sq. ft. commerical gross floor area. S22 is situated at the heart of Wong Chuk Hang is less than a one-minute walk from the MTR station.
The development offers high ceilings, flexible floor plates and has full coverage of high-performance technology such as 5G, Wi-Fi 6 and leading EV chargers. The area will benefit from this asset, especially as the development has been designed to meet the needs of its modern community with emphasis on quality, flexibility, connectivity, technology and wellbeing.
"S22 on Heung Yip Road, a project from the developer Empire Group, will provide more than 160,000 sq. ft. commercial gross floor area."
SystematicEdge Limited Managing Director Rosemary Goater is thrilled that the company decided to move to WCH from Admiralty in 2020, right at the start of the COVID-19 pandemic. The financial services provider was in growth mode and needed more space.
The company almost trebled its space and is just a five-minute walk from the MTR. As a bonus, the company was also able to upgrade its office and offer staff magnificent sea and mountain views.
Rosemary appreciates the area’s accessibility and the flexibility the office provides for its employees to adopt their preferred working styles. “The amount of development has been quite relentless, in terms of new office buildings and also new eateries, which is also very important for lunch, and food deliveries,” she says.
The time to move is now
As more Grade A offices are built in WCH, retail opportunities will increase. However, by the end of this year, rents on Hong Kong Island will be 4% down overall, but WCH will only be 2% down YoY. Next year, the neighbourhood will hold steady, while the average Island rents are forecast to increase by 4%.
But, by the end of 2024, when the island’s rents are forecast to rise by a further 7%, WCH will only be 4% more expensive. Companies looking for spacious, affordable offices in one of Hong Kong’s brightest, urbanised areas should consider locking in leases early before the market turns.
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