Swire Properties plans to spend HK$15 billion over the next five years expanding Taikoo Place, its office district in Quarry Bay, and stitching it together with the nearby Cityplaza mall and neighborhood shops under a single brand, the developer said on Monday.

The plan, which Swire calls One Taikoo, is a sizable bet on Hong Kong Island's eastern corridor at a time when the city's office market, though recovering, is still working through high vacancy and new supply. For investors in Hong Kong landlords, it is a signal of where one of the city's biggest commercial owners sees value: in amenity-rich districts that can win tenants moving up to better space, rather than in the wider pool of older buildings.

Swire said the money will go to acquisitions, phased redevelopment, refreshed retail, events and better walkway links across the area. The aim is to turn a business hub into a mixed-use district with offices, shops, hotels, homes, arts space and wellness facilities.

“Our continued investment in Taikoo Place reflects our long-term commitment to Hong Kong,” Tim Blackburn, chief executive of Swire Properties, said in the statement.

A New Harbourfront Tower With Chinachem

The centerpiece is a new Grade A office building on Tong Chong Street. Swire and Chinachem Group said on Oct. 16 that they will redevelop Sea View Building and Hoi Wan Building together with Chinachem Exchange Square on a combined site of roughly 35,000 square feet.

Subject to statutory approvals, the project is expected to deliver about 500,000 square feet of gross floor area: a 27-storey office tower, a retail podium and basement parking. Groundbreaking is expected in 2027, and WilkinsonEyre is the architect. The building will connect into Taikoo Place's climate-controlled elevated walkways, which lead to Quarry Bay MTR station.

The site took more than a decade to assemble. Swire had acquired more than 93% of the two aging walk-ups on Tong Chong Street and Hoi Wan Street before winning the remaining units at a compulsory sale in May, according to Mingtiandi and The Standard.

Housing is also part of the plan. A joint-venture development on King's Road and Pan Hoi Street will provide 850 homes across three towers above a retail podium linked to Taikoo Place, with completion expected in 2029, Swire said on Monday.

Cityplaza, which Swire describes as Hong Kong Island's largest shopping mall, is being upgraded and its brand mix reworked. Together with Taikoo Place and the surrounding streets, the area has more than 400 shops and food and beverage outlets, the company said. A padel club with six competition courts is due to open at Shipyard Lane later this year.

Betting on Quality in a Recovering Office Market

The market is improving but remains loose. Hong Kong's office vacancy rate fell to 15.5% in the third quarter, the lowest since early 2023, and rents rose 3.2% from the previous quarter, according to CBRE. In Hong Kong East, JLL put Grade A vacancy at 13.0% at the end of July. Swire's own portfolio shows the strain: Mingtiandi reported in May that Two Taikoo Place, a one-million-square-foot tower completed in 2022, was only about 70% occupied at the end of 2025, and occupancy in the older Taikoo Place buildings had slipped to 88% from 91% a year earlier, according to Swire's annual results.

Swire's argument is that the best buildings keep winning. In its October announcement, the company pointed to recent leasing at Taikoo Place, including BNP Paribas renewing about 200,000 square feet, Prudential Hong Kong renewing and expanding to about 83,000 square feet, and FWD taking 330,000 square feet for a decade. Taikoo Place houses more than 300 multinational companies, Swire said.

In its interim results on Aug. 6, Swire Properties said office leasing had improved in recent months, helped by stronger capital-markets sentiment and an active IPO pipeline. Hong Kong's IPO market has been on a record pace this year, which tends to lift demand from banks, law firms and advisers.

The company's first-half underlying profit attributable to shareholders rose 11% to HK$4.9 billion, driven mainly by the sale of two houses at 6 Deep Water Bay Road and higher retail rental income. Its Hong Kong malls were 100% occupied. Swire raised its interim dividend 6% to HK$0.37 a share and said it aims for mid-single-digit annual dividend growth.

Part of a Larger Spending Program

The Quarry Bay spending sits inside Swire Properties' HK$100 billion investment plan, about 70% of which was committed as of August. More than 90% of the capital earmarked for mainland China was already committed, the company said, and it has raised about HK$60 billion in cumulative proceeds from selling assets.

The developer is also exporting the brand. Its INDIGO mixed-use project in Beijing's Chaoyang District has been renamed Taikoo Place Beijing ahead of a second phase. When finished, the riverside development will cover more than 860,000 square meters of gross floor area, including eight Grade A office towers, a mall and a new hotel, Swire said.

Swire Properties did not give a breakdown of the HK$15 billion by project or say how much of it was already counted in earlier commitments. The next marker for investors is the company's operating update for the third quarter, which would show whether Taikoo Place occupancy and rents have firmed as the new tower moves toward its 2027 start.