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HONG KONG: Strong growth is expected in Hong Kong office rental market over the next 12 to 18 months and rents will increase as office space availability decreases amid fast absorption of prime office space, according to Knight Frank's latest Hong Kong Prime Office report.
With developed economies stagnating, some multinational corporations decided to relocate their operations and executives to Hong Kong to capitalize on the robust growth in China, said Knight Frank.
In July, Grade A office sales rebounded over 40%, totaling over 300 deals after a three months consolidating period. This is the highest level since February 2008.
Prices rebounded 2.9% after a 3.8% correction over the past three months with Sheung Wan in the lead with growth of 4.6%, followed by 4% in Causeway Bay and 3.3% in Wanchai.
Knight Frank noted that office prices in some districts are growing increasingly closer to the high levels recorded before the onset of the financial crisis.
A notable en-bloc transaction occurred in July with the acquisition of 88 Gloucester Road in Wan Chai for HK$1 billion (RM403.46 million) or HK$10,460 psf. It was the fourth transaction worth over HK$1 billion this year.
In Sheung Wan, a 1,440 sq ft unit in Shun Tak Centre (West Wing) was sold for HK$22.8 million or HK$15,800 psf, the highest price achieved in the building on a per sq ft basis.
Some property investors cashed in on the rising office market — a unit in Wing On House in Central was sold for HK$9,831 psf, one month after it was acquired for HK$8,685 psf.
The leasing market was fueled by the aggressive expansion plans of some corporate firms. Among the leasing deals are an accounting firm taking up 130,000 sq ft of space in Citic Tower, Admiralty, a financial company leasing more than 100,000 sq ft of space in Three Exchange Square, Central and JardineEngineering's lease of 70,000 sq ft of space in Manulife Financial Centre, Kwun Tong.
Tenant were forced make early per-let commitments due to limited availability. Knight Frank citied as examples, a beauty salon committing to soon-to-be-vacated 50,000 sq ft of space in Times Square, Causeway Bay, while a financial institution that took up three whole floors in One IFC in June, had committed to another one-and-a-half floors in Two IFC, which will only be vacated in mid-2011.
With robust office demand, rents registered its fastest month-on-month (m-o-m) growth of 3% in July since April 2008. Sheung Wan led the Grade-A office market with a growth of 5.2%, followed by 4.8% in Causeway Bay and 4.6% in Premium Central. Tsim Sha Tsui also showed good rents growth of 3.2%, its largest m-o-m increase in the past seven months.
Vacancy rates continued to decline, significantly Causeway Bay with 4.1% occupancy rate in July compared to 6.7% in March. North Point and Tsim Sha Tsui rates fell 1.8% and 0.7% respectively during the same period.
With developed economies stagnating, some multinational corporations decided to relocate their operations and executives to Hong Kong to capitalize on the robust growth in China, said Knight Frank.
In July, Grade A office sales rebounded over 40%, totaling over 300 deals after a three months consolidating period. This is the highest level since February 2008.
Prices rebounded 2.9% after a 3.8% correction over the past three months with Sheung Wan in the lead with growth of 4.6%, followed by 4% in Causeway Bay and 3.3% in Wanchai.
Knight Frank noted that office prices in some districts are growing increasingly closer to the high levels recorded before the onset of the financial crisis.
A notable en-bloc transaction occurred in July with the acquisition of 88 Gloucester Road in Wan Chai for HK$1 billion (RM403.46 million) or HK$10,460 psf. It was the fourth transaction worth over HK$1 billion this year.
In Sheung Wan, a 1,440 sq ft unit in Shun Tak Centre (West Wing) was sold for HK$22.8 million or HK$15,800 psf, the highest price achieved in the building on a per sq ft basis.
Some property investors cashed in on the rising office market — a unit in Wing On House in Central was sold for HK$9,831 psf, one month after it was acquired for HK$8,685 psf.
The leasing market was fueled by the aggressive expansion plans of some corporate firms. Among the leasing deals are an accounting firm taking up 130,000 sq ft of space in Citic Tower, Admiralty, a financial company leasing more than 100,000 sq ft of space in Three Exchange Square, Central and JardineEngineering's lease of 70,000 sq ft of space in Manulife Financial Centre, Kwun Tong.
Tenant were forced make early per-let commitments due to limited availability. Knight Frank citied as examples, a beauty salon committing to soon-to-be-vacated 50,000 sq ft of space in Times Square, Causeway Bay, while a financial institution that took up three whole floors in One IFC in June, had committed to another one-and-a-half floors in Two IFC, which will only be vacated in mid-2011.
With robust office demand, rents registered its fastest month-on-month (m-o-m) growth of 3% in July since April 2008. Sheung Wan led the Grade-A office market with a growth of 5.2%, followed by 4.8% in Causeway Bay and 4.6% in Premium Central. Tsim Sha Tsui also showed good rents growth of 3.2%, its largest m-o-m increase in the past seven months.
Vacancy rates continued to decline, significantly Causeway Bay with 4.1% occupancy rate in July compared to 6.7% in March. North Point and Tsim Sha Tsui rates fell 1.8% and 0.7% respectively during the same period.
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