HK Govt Offers Low Rent At High-Tech Cyberport
Dow Jones Newswires
April 20, 2001
Dow Jones Newswires
HONG KONG -- The Hong Kong government Friday announced it will begin accepting applications for tenants at the HK$15.8 billion high-tech Cyberport project currently being developed by Pacific Century CyberWorks Ltd. (PCW).
The government set monthly rental rates at HK$11.00-HK$13.00 per square foot, though rentals will vary between floors and locations. Rents may be adjusted according to prevailing market conditions, the government said.
The government is providing the land for the Cyberport project free of charge, while PCCW is paying construction costs, which have been fixed at HK$15.8 billion based on current market prices.
So far, 270 companies have expressed interest in becoming office tenants at Cyberport, including 15 that have signed a letter of intent to become anchor tenants at the combined residential and office development.
Those 15 include some of the world's biggest names in technology, such as Cisco Systems (CSCO), Hewlett-Packard (HWP), CMGI (CMGI), IBM (IBM), Microsoft (MSFT), Oracle (ORCL), Yahoo! (YHOO), Softbank (J.SBC) and Legend Holdings (H.LHD).
In an effort to create a high-tech center and lure the hottest high-tech companies, the government is offering rents below rates for similar space elsewhere in the city, analysts said.
The rents are in line with industrial space rents, rather than prime office space, as such tenants don't need to be in the heart of the financial district, said Robert Fong, property analyst at Salomon Smith Barney. But the rents are also less than half similar space in Quarry Bay, a district where some high tech firms are currently located, he said.
"There's an implicit subsidy there," said Fong. They are "attractive prices."
When finished, the Cyberport will house about 150-200 companies of varying sizes.
Construction started in May last year, with Cyberport scheduled to open in phases from early 2002 to the end of 2003. It will feature state-of-the art telecom infrastructure with both offices and residential accommodation within a campus-like environment.
As the developer, PCCW will receive proceeds from residential sales in proportion to its capital contribution. All other income generated from the project, including office rentals, will belong to the government.
-By Kirsti Hastings, Dow Jones Newswires; (852) 2832 2337; kirsti.hastings@mfdowjones.com
-0- 20/04/01 07-50G
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