Office rents sink further in HK

Hong Kong's overall office rents have fallen for six consecutive quarters.

Rents in Admiralty, Central and Sheung Wan have fallen by 22 percent from the peak in the first quarter of 2019, Cushman & Wakefield reported.

The demand for offices in the third quarter hit the bottom on record, pulling net absorption from year to date down to negative 1.7 million square foot, equivalent to the space of one block of Two ifc.

The average rents are expected to fall by 16 percent to 21 percent this year.

John Siu, managing director, Hong Kong, said the vacancy rate will continue to rise in the next few quarters if the economy shrinks and the virus outbreak escalates.

In the retail rental market, rents continued to decline in the last quarter, though at a slower pace. Causeway Bay vacancy rate climbed to a record high.

Rents in Causeway Bay fell by 7.9 percent compared with the second quater. The vacancy rate was 13.2 percent.

In central, the rents fell by 7.8 percent, with 16.9 percent vacancy rate.

Kevin Lam, executive director and head of retail services, Hong Kong, said there will not a big fall for rents in Causeway Bay in the fourth quarter as the shop owners are not willing to cut prices.

Some short-term leases may pop up in the last quarter due to the holiday season.