Hong Kong's abandoned Kai Tak Airport, idle for 13 years, may hold the answer to a space shortage in the world's costliest office market where banks including Goldman Sachs jostle for towers.
Visible across Victoria Harbour from the banking heart of Central, the overgrown landing strips and dilapidated hangars on which the government plans to build housing and a stadium cover an area almost the size of New York's Central Park.
The site could be redeveloped to add as much as 4 million sq m of prime offices by 2021, said Nicholas Brooke, founder of Hong Kong-based Professional Property Services.
Brooke said that in the past six months he met the Asian heads of four of the world's biggest investment banks and heard the same message: If rents keep going up and Hong Kong doesn't build more prime office space, they soon will have to relocate parts of their operations to other Asian cities.
Prime office rents in the financial gateway to China have risen 60 per cent since July 2009, according to CB Richard Ellis Group. Hong Kong rents in buildings considered of high quality were US$9.80 a square foot per month at the end of the second quarter, compared with US$8.40 in Singapore and US$3.90 in Shanghai, said Cushman & Wakefield, the world's biggest privately held commercial brokerage.
There was no new supply of prime office space in Central from 2007 to last year.
"We're getting close to a point when rents become unaffordable," said Simon Smith, Hong Kong-based head of Asia research at Savills.
"If you look around other office markets in the world, they've all been forced to develop decentralised office areas."
Canary Wharf, in the East of London, was transformed from disused docks and warehouses into the city's second financial centre in the 1980s and 1990s. The prime office vacancy rate in Central, where HSBC and Goldman Sachs have regional headquarters, fell to 3.7 per cent in July from almost 6 per cent two years earlier, Los Angeles-based CB Richard Ellis said.
"Hong Kong's office market is like a dragon dance," said John Siu, Hong Kong-based executive director at Cushman & Wakefield, referring to a Chinese festive dance in which a team manipulates a serpent's body on poles to make it move in an undulating manner.
"Any price change in Central would have a domino effect on other areas."
Financial services companies began moving parts of their offices to Kowloon East - an area of industrial complexes and housing that spans three subway stations - in the late 1990s as they sought to save on rent.
The 320ha airport site is about 10km across Victoria Harbour from Central.
* Mountains to its north and skyscrapers near Kai Tak Airport forced pilots to make sharp turns at low altitudes to line up with a runway extending on to reclaimed land jutting into the harbour.
* The landing manoeuvres and descent over heavily populated areas, including six-storey buildings across the road from the main runway's north end, ranked Kai Tak among the world's most dangerous airports.