Hong Kong's Cyberport Lettings Are Not Going Well

by Mary Swire, Tax-News.com, Hong Kong

19 February 2003

Hong Kong's Cyberport development, a joint venture project between the government and PCCW, is struggling to fill its space as the SAR's property slump continues alongside bad times in the TMT sector.

According to figures from management company Hong Kong Cyberport Development Holdings, eighteen tenants have so far taken up about 28,500 square metres of lettable area in four completed buildings, representing about 52% of the 55,000 sq metres of completed floor area and about 30% of Cyberport's total available 94,141 sq metres.

Just seven of the original 40 firms which said they would move to Cyberport in 1999 have honoured their non-binding statement of intent, and after extensive roadshows in mainland China as well as other major Asian economies, the management company is now broadening the scope of its marketing efforts to include smaller, local companies.

Nonetheless, the company claims it is happy with progress so far. "We did not set any expectations, and there has been no delay in the construction project. Overall, we are satisfied," said spokeswoman Kathleen Chan.

Cyberport co-ordinator Betty Fung Ching Suk-yee said: "This is a new concept to sell. Cyberport is a showcase of how Hong Kong can put together a world-class telecoms and technological infrastructure."

As part of its pitch towards smaller technology companies, Cyberport is opening a digital media centre, incorporating a 300 sq meter wireless development support centre. Mrs Fung said five of Hong Kong's six mobile operators supported the concept and were willing to sponsor it.

Meanwhile, the residential side of Cyberport's offering is also making heavy weather of its sales program. After several months of marketing, only 50 units out of the 544 units in Residence Bel-Air, the phase-one development of Cyberport, have been sold.

Construction of the Cyberport commenced in May 2000 and it is opening in phases between mid-2002 and the end of 2003. It is serviced by a state-of-the-art telecommunications infrastructure, supported by offices and accommodation of "a world class standard", says the goverment. The environment is campus-like and aims to attract a cluster of companies specialising in areas of information technology, information services and multimedia.

When completed by the end of 2003, Cyberport will include 1.1 million sq ft of offices, a 270,000 sq ft commercial centre and a hotel. The residential development will consist of 2,800 luxury flats and will be completed between 2004 and 2007.

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