Strong roll-up of IT tenants puts project on track
Wednesday, February 27, 2002
HUI YUK-MIN
The Government has expressed optimism about the controversial HK$15.8 billion Cyber-Port project after receiving a warm re ception from information technology (IT) companies.
More than 30 IT companies had applied to the Government to be among the first Cyber-Port tenants, according to Information Technology and Broadcasting Bureau (ITBB) deputy secretary Annie Tam Kam-lan.
Ms Tam said the project was on track and she expected the first development phase to be completed next month, allowing anchor tenants to start moving in as early as April.
However, only eight to 10 companies can be housed in the first phase.
Ms Lam said some prospective tenants had signed lease agreements but she refused to disclose names.
The first phase of the Cyber-Port project will provide 245,000 square feet of office space and 20,000 sq ft of retail space.
Sylvia Lee, corporate sales general manager of the project's developer, Pacific Century CyberWorks (PCCW), said the Cyber-Port would offer the world's most comprehensive IT infrastructure.
Ms Lam said Cyber-Port's office space, at a monthly rate of between HK$11 to HK$13 per square foot plus a HKS$5.5 per month per square foot management fee, was highly competitive with grade-A office space in the rest of Hong Kong.
Grade-A office buildings in Central are charging an average of HK$30 to HK$40 per square foot.
The entire Cyber-Port project, expected to be completed by mid-2007, will offer about 900,000 sq ft of leasable office space, 270,000 sq ft of commercial space and 2,800 residential units with a total of about four million sq ft.
Ms Lam said the Government was certain to generate profit from the Cyber-Port project as all construction costs would be borne by PCCW.
The Government would not only receive rental income but also share surplus sales proceeds from the sale of residential blocks, she said.
PCCW, however, could record a loss if sales of residential blocks were unsuccessful.
PCCW has spent about HK$2 billion on the project and Ms Lam estimated the company's investment could increase to HK$7 billion by the end of the year when it started to pre-sell the residential units.
Once it began selling the units, PCCW could stop financing the project as the outstanding construction costs would be covered by the sales proceeds, Ms Lam said.
After deducing the remaining construction costs, the surplus sales proceeds would be split between the Government and PCCW.
If the residential units were to be sold at HK$4,000 per square foot, the Government could have a share of about HK$3.5 billion in revenue.
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Published in the South China Morning Post. Copyright © 2002. All rights reserved.
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