Hong Kong commercial real estate may get new lease of life amid US-China trade war, protests from education providers

By Martin Choi martin.choi@scmp.com / https://www.scmp.com/business/article/3025477/hong-kong-commercial-real-estate-may-get-new-lease-life-amid-us-china?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 11, 2019 11:57 AM SGT
Education providers could drive demand for commercial spaces in Hong Kong, thanks to an uptick in the need for private tuition and interest classes for children in the city.
"There is a strong demand from parents looking for boutique education providers, especially for playgroups, early childhood learning centres and various interest classes, as supplementary education for their children," said Michael Wong, head of sales and leasing at Prime Property Consultants.
"Similar to the medical sector, education providers have a tendency to agglomerate and locate themselves close to each other," he said.
"A cluster can attract more customers, as providers tend to offer different products, meaning that parents can bring their children to attend a range of different classes, or workshops, within the same area, reducing their travel time and search costs. A well-planned tenant mix would help the landlord of an education-themed building develop a reputation," Wong said.
For instance, Hong Kong-based investment holding company Get Nice Holdings Limited, the landlord of a 14-storey commercial building in Hung Hom, wants to capitalise on this trend, and is looking to rent all floors to education providers only.
The company is targeting education centres, kindergartens, tutoring classes and interest classes for the Get Nice Centre, according to real-estate agency Midland IC & I, which has been appointed to rent out the property.
The building is a one-minute walk away from the Ho Man Tin MTR station. Its first four floors offer around 3,700-3,800 sq ft each, while the fifth floor and above offer 2,889 sq ft each, with the whole building offering a total of about 48,000 sq ft, according to Julius Li, sales director at Midland IC & I.
Leases start from HK$26 (US$3.3) per square foot, and the building is up for sale at the same time, according to the real-estate agency.
"So far, this is the only case we know of a landlord renting a whole building out for education purposes. Others are renting out individual units, but it's...