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High hopes for new central project

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Commercial viability, smart principles, connectivity and liveability.

The government has confirmed Henderson Land Development had paid the full HK$50.8 billion lump-sum premium for New Central Harbourfront Commercial Site 3. As we know, six tenders passed the design part of the two-envelope approach requirements, but only two met the government’s reserve price.

Regardless of the winner and the price, there is a responsibility to deliver value from this sale. Henderson can do this by creating new opportunities, and is likely to plug the site into its existing portfolio in the wider Central area.

To unpack the site’s possibilities, Colliers recently held an event titled "Site 3: A city on the cusp". It brought together some of the market’s key thought leaders to examine the site’s opportunities against commercial viability, smart principles, connectivity and liveability.

Site 3 isn’t game-changing in terms of new office stock. Once completed, it will add 660,000 sq ft to the wider central business district’s (CBD) 18.8 million sq ft net floor area of grade A office space. But it does offer a large, unique floor plate – something that is relatively limited in other office buildings in Hong Kong.

Large companies can lease a single floor in a low-rise building, consolidating all their staff in one area, in the most prime location. There is also potential to develop a more tailored workspace, not defined by the city’s traditional CBD floor plate.

We have already seen interest in the space. Don’t be surprised if a large chunk or all of it is snapped up by a significant local or multinational occupier.
The development complements Henderson’s other assets in Central – International Finance Centre I and II and the Four Seasons Hotel – making it strategically important to the firm.

Henderson’s plan puts the retail portion of Site 3 close to 1 million sq ft, some 58 per cent of the total gross floor area. Together with IFC Mall and Landmark’s retail portfolio, Central could surpass Harbour City in Tsim Sha Tsui as Hong Kong’s most extensive high-end shopping area – a key factor in commercial viability.

Hong Kong has a clear vision to embrace innovation and technology to build a world-class smart city, as outlined in the Smart City Blueprint 2.0. While there seems to be a lag in smart building development, it appears to be more about change management and people becoming used to the idea of interacting with buildings.

Henderson can use data from its existing portfolio to inform its future tenant mix and optimise management services. Using this data to inform smart design will also enhance tenants’ productivity by maintaining the best possible working environment for their staff.

Site 3’s retail area will be vast, highlighting the need to monitor consumer flow and engagement to optimise layout and positioning for maximum footfall.
The site will become a hub for all forms of transport on Hong Kong Island, and linking these modes over such a large area will require complex management, good signage and easy-to-follow directions. This will act as a flywheel of success for each of the pillars discussed: driving footfall for the commercial element of the site, creating a flow of people for the retail component, becoming a place of leisure for the general public, enhancing the city’s liveability and leading the way in sustainable best practice.

Site 3 also needs to be an expression of Hong Kong and the people who live here. It will be Central’s front of house to the Greater Bay Area and the image Hong Kong projects to the rest of the world to cement its standing as a Tier 1 city.

This is an opportunity to enhance the image of this part of Central, from its current skyscraper block development visage to a more public-oriented town vibe, with a focus on green space, walkability and free pedestrian movement.

The majority of experts I’ve spoken to believe Site 3 must be for everyone to enjoy. It affects so many aspects of the city in a holistic, sweeping manner that brings stability, wellness, culture, environmental improvements, economic value and education to the forefront.

There is a need in Hong Kong to service the public with free space that can be accessed 24/7 at no charge and appeals to all ages. On the government’s essentials list are public open spaces, only 5 per cent of which can be used for commercial features, such as alfresco dining. Hong Kong lacks random free space, where the public can do as they please, and hopes are high that Site 3 will deliver some.

Sustainability is a significant factor, and construction and lighting are the biggest drivers of Hong Kong’s carbon emissions, so if the site’s construction and operations can take a proactive approach to minimising its carbon footprint, it should be an easy win.

I have great expectations from this development and look forward to it living up to its promise.

The article was published on South China Morning post on 14 December 2021.

Artist rendering of Henderson Land’s design for Site 3. Source: Hong Kong Government

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Nigel Smith

Senior Consultant

Managing Director's Office | Hong Kong

Hong Kong

Nigel Smith is a Senior Consultant at Colliers based in Hong Kong and is responsible for managing key client accounts and mandates. With over 30 years working and living in Hong Kong, he has a wide knowledge of real estate covering development, transactions and advisory.  Nigel has worked on many large mixed use projects and super tall office towers accross Asia and is an expert in development design, branding, marketing and leasing. 

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