<div id="readability-page-1">Hong Kong’s West Kowloon is poised to emerge as the second-most important office sub-market after Central with the completion of new buildings that will accommodate banks and insurance companies, according to industry officials. However, there was expected to be limited demand from newcomers or via corporate expansion, with leasing activity dominated by relocations and higher vacancy rates in some of the city’s other business districts. The 40-hectare stretch of reclaimed land is being touted as ‘Central 2.0’ with the likes of Swiss bank UBS, US-based investment bank JPMorgan Chase and Spain’s Banco Santander leasing spaces from Sun Hung Kai Properties (SHKP) in the district that was originally envisioned to be the city’s premier arts and culture hub. UBS will be the anchor tenant of UBS Tower at the International Gateway Centre (IGC), a 14-storey, 460,000 sq ft grade A office building by SHKPlocated above the West Kowloon high-speed terminus rail station. IGC is SHKP’s new flagship commercial development, consisting of two towers and four prime office blocks totalling about 2.6 million sq ft. UBS plans to begin moving into the building from the fourth quarter, bringing together staff currently spread across five offices, including Two IFC and One Peking Road. “West Kowloon is Hong Kong’s future-focused international business district,” said Lo King-wai, executive director at Sun Hung Kai Real Estate Agency. “It is rapidly emerging as ‘Central 2.0’ and a dynamic hub for commerce, arts, culture, sustainability and retail.” In March, JPMorgan committed to leasing about 250,000 sq ft for 10 years at another SHKP project, Artist Square Towers (AST), making it the anchor tenant of the 700,000 sq ft mixed-use development. AST will house the bank’s Kowloon office, which is currently located at the Quayside in Kowloon East, starting in the latter half of 2028. However, it plans to keep its main office in Central. Last month, Banco Santander became the first tenant to move into the IGC. The bank occupies an entire floor in one of the towers, spanning about 37,000 sq ft. Once IGC and ATS are fully completed, SHKP’s office portfolio in West Kowloon will be bigger than that of Central, where its investment in One and Two IFC were joint ventures.  An advantage that West Kowloon enjoys over Central is its “unparalleled seamless connectivity between the Chinese mainland and the world, via Hong Kong’s only high-speed rail station below and the adjacent Airport Express, as well as its convenient access to Central and all major business districts,” Lo said. Hong Kong’s high-speed rail station links to over 50,000 kilometres of the national railway network and 110 stations on the mainland, serving a market of more than 520 million people including 80 million in the Greater Bay Area. Travel time to Shenzhen Futian station is about 14 minutes while Guangzhou is under an hour, Lo added. “Together with the Airport Express, this creates seamless air-rail connectivity, linking West Kowloon to both the mainland and international destinations,” he said. Although West Kowloon district is thriving because of interest in its prime office spaces, it is also having the negative effect across the city of “accelerating market polarisation and not growing net demand,” said Ada Fung, chief operating officer for advisory services at CBRE. “Hong Kong’s office challenge is not insufficient choice, but insufficient net expansion demand,” Fung said. “As a result, leasing activity is largely redistributive – tenants upgrading, relocating, or consolidating rather than expanding. West Kowloon therefore tends to come at the expense of other locations, particularly those that cannot compete on quality, connectivity, or ESG (environmental, social and governance) credentials.” As of end March, overall empty spaces in Hong Kong’s premium office property edged up to 13.5 per cent from 13.4 per cent as of February as the vacancy rate in Kowloon East surged 20.4 per cent from 19.5 per cent. Meanwhile, districts such as Central, Hong Kong East and Tsim Sha Tsui recorded lower monthly vacancy rates, data tracked by JLL showed. Although each office district offers a variety of different business and operational roles for Hong Kong firms, West Kowloon is “the most active sub-market outside Central as it meets the needs of the main expansionary sector, being both insurance and finance,” said Sam Gourlay, head of office leasing advisory for JLL in Hong Kong. In the long term, Gourlay said West Kowloon and Central would be complementary instead of competitors that allow “dual site operations or an extension of the wider Central offering.” “The continuation of West Kowloon as a finance and insurance hub, in particular those with a mainland China focus, is inevitable with its unique connectivity of the high-speed rail,” he said.</div>

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<p>Hong Kong's West Kowloon is emerging as a significant office sub-market, potentially becoming 'Central 2.0' with new developments attracting major banks like UBS and JPMorgan Chase. Despite limited demand for new corporate expansions, the area is seeing relocations and higher vacancy rates in other districts. West Kownoon's connectivity via high-speed rail enhances its appeal, although it may lead to market polarization. Experts suggest that West Kowloon will complement Central rather than compete, particularly for finance and insurance sectors focused on mainland China.</p>

Is Hong Kong’s cultural hub of West Kowloon emerging as ‘Central 2.0’?