Office Market Review
It is not all doom and gloom, and office leasing opportunities abound in Hong Kong.
Amidst the challenge of Covid-19, the political uncertainty for the territory and a weak leasing market, there are still a few silver linings around.
To get the whole story and the latest office rental rates
- Falling rents – overall rents are down by 11% from their peak in Q2 2019. We predict a further fall for the full year of 2020 of around 18 - 20% in the prime CBD area (Central/Admiralty) and 14% overall. Thus, offices will continue to become more affordable.
- The CBD office vacancy rate has increased to around 6%, which means a much wider choice of stock for tenants to pick from.
- Much has been written about competition from other regional financial centers, such as Singapore, but Hong Kong will still remain the gateway to China.
- Landlords have become far more flexible in an endeavor to retain tenants and secure new ones – hence more room to negotiate on the rates, rent free periods and more flexible lease terms.
- It is also simpler to set up a business in Hong Kong than say Singapore, where foreign firms need to team up with a local partner.
- Demand will continue to be led by sectors such as finance, insurance, banking and business services, especially for mainland China.
- Closer integration of the Greater Bay Area with its many incentives will help strengthen Hong Kong's competitiveness.