Core district office rents projected to drop by 10pcBusiness | 21 Jan 2020 8:21 pm
Realtor Savills predicts that office rents in Hong Kong's core business districts will drop by 5-10 percent this year.
Hong Kong's grade-A office rents dropped by 1.5 percent from a quarter ago during the last quarter in 2019, worsening from a 1 percent decrease in the third quarter, with the vacancy rate rising to 4.7 percent by the year-end, according to Savills.
Among the core business districts, office rents for grade-A offices in Wan Chai/Causeway Bay slid by 2.5 percent compared with the third quarter last year, while those of offices in Central slid by 1.7 percent.
Grade-A office rents in Tsim Sha Tsui fell by 1.6 percent quarter-on-quarter.
Operators in retail, food and beverage and hotel sectors have consolidated and moved out of Wan Chai and Causeway Bay area in recent months, especially the mainland co-working brands which have exited the Hong Kong market, according to Savills.
Office rents in Kowloon East and Kowloon West dipped by 0.7 percent and 0.4 percent from a quarter ago, respectively.
Savills expects the active initial public offering market this year will become the key factor that attracts mainland companies to enter the market, despite the current week demand.