Companies To Refocus On Hong Kong, Says Swire Properties, Hongkong Land

HONG KONG – Two major office landlords in Hong Kong believe that multinational and Asian businesses will refocus on the city amidst the recent relaxation of COVID-19 measures and the anticipated reopening of the border with mainland China, and this refocusing would help the metropolis retain its global financial hub status, reported the South China Morning Post (SCMP) on Monday morning (19 December, SGT).

“Assisted by the easing of border and social-distancing restrictions, we expect international and Asian financial and professional services businesses to refocus their attention on Hong Kong because of the city’s continuing role as China’s international hub for capital and finance,” said Hongkong Land’s Head of office and commercial property, Neil Anderson.

Notably, Hongkong Land is the top commercial property landlord in Central. Its property investment portfolio in the district that includes the Landmark and Exchange Square.

Last week, city officials announced the largest easing of its COVID-related restrictions since the pandemic’s onset nearly three years ago: permitting inbound travellers to freely move in Hong Kong if they test negative. Apart from ending the use of the “Leave Home Safe” risk-exposure app, Chief Executive John Lee Ka-chiu revealed that quarantine-free travel to mainland China could be possible next year.

“These latest arrangements will help boost positive market sentiment, and send an important message to the international community that Hong Kong is resuming its normal social and economic activities,” noted Swire Properties Chief Executive Tim Blackburn.

“This will also facilitate international travel and help Hong Kong retain its status as an international financial centre.”

Notably, Swire Properties owns roughly 16.8 million sq ft of commercial property in Hong Kong, including Cityplaza, Pacific Place, Taikoo Place, and Citygate Outlets.

However, Swire Properties’ Blackburn said the city’s overall office market has remained weak because of macroeconomic and geopolitical uncertainties. Based on data from Jones Lang LaSalle (JLL), Hong Kong’s overall office vacancy increased from 9.4 percent last December to 11.6 percent at the end of November 2022.

Average rents of Grade A office buildings across the city also fell by 3.3 percent during the 1st 11 months of the year, added the real estate consultancy.

Still, Hongkong Land’s Anderson said its office assets in Central has remained resilient. For instance, the vacancy rate of Hongkong Land’s office properties in the district only fell to 4.8 percent in September on a committed basis compared to 5.1 per cent as of the end of June 2022. And this is better than the 8.3 percent overall vacancy rate in September of Grade A office buildings in Central.