Over the past decade, a shortage in the supply of land is largely to blame for the inadequate amount of office space in the Hong Kong office market. With rents in Central among the highest in the world, demand has grown steadily for affordable office space in those decentralised locations seeing rapid development such as Hong Kong East and Kowloon East. However, Wong Chuk Hang, another decentralized location situated in the southern part of Hong Kong Island, should not be overlooked as an emerging business district.

Let’s take a step back and consider the key elements that are required for a decentralised district to attract the banking and finance tenants traditionally found in Central.

1. Firstly, convenient transportation to/from Central.

• Over the last few years several large banks have relocated their back office operations to decentralised locations which are close to an MTR station. Take Kwai Chung, an industrial area near the city’s container port, as an example. The completion of Kowloon Commerce Centre, a high-spec Grade A office building in close proximity to the MTR station, prompted several large banks including Bank of America Merrill Lynch to relocate part of their back office into the area.
• The completion of the MTR’s South Island Line in 2016 will help reduce travel time between Central and Wong Chuk Hang to less than 10 minutes.

2. Secondly, sufficient office supply with convenient amenities such as shops, restaurants and hotels.

• The market needs to be well provisioned not only with high quality offices but also supporting shopping, dining and hospitality facilities.
• At least 700,000 sq ft of new Grade A office space will be added to the Wong Chuk Hang market over the next several years. As the office pipeline enlarges, more hotels and hip restaurants are opening in the area. Ovolo Hotel, for example, opened its doors to the public earlier this year.

3. Lastly, Rome wasn’t built in a day.

• In addition to the planned infrastructure and town planning, it takes time to transform a market into a mature business community. Compared to Hong Kong East and Kowloon East, there is a lack of business diversity in Wong Chuk Hang to make it a market focus at the moment.
• It took Hong Kong East more than a decade to transform from an industrial area into a commercial hub. The relocation of several MNC pioneers into the area attracted further businesses into the area to build the critical mass. Companies in the area now range from consumer products to insurance to technology and telecommunications.

I believe Wong Chuk Hang has the potential to draw considerable interest from both end-users and tenants looking for middle and back office space. And with several international banks entertaining the idea of relocating their operations out of Central, it may not be surprising to see a bank moves its back office to Wong Chuk Hang once the South Island Line is operational.

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