HK Office Leasing Deals

HK Office Leasing Deals Hit A 5-month High

HONG KONG – Real estate agency Midland IC&I revealed that office rental transactions in the Chinese territory increased to a five-month high in April, reported The Standard on Monday morning (16 May, SGT).

At the same time, deal volume in Hong Kong’s top 50 Grade A office buildings recovered to 9, a level last witnessed in January 2022 when the COVID situation in the city was more stable.

While sales of Hong office properties have become more active, office rents and office capital values remain low, noted Eric Ong, a Sales Director at Midland IC&I.

As a matter of fact, selling prices of Grade A office units in Hong Kong dipped 0.1 percent in April 2022 on a monthly basis, while office rents slid by 0.3 percent over the same period, he said.

In Hong Kong Island’s core areas, like Central and Admiralty, owners of Grade A office properties have to slash their asking rents to attract occupants, Ong shared, adding that office rents in some office buildings, including The Center and Three Pacific Place, were 10 percent to 30 percent lower compared to several years ago.

This trend has brought down office rents in Central, where it contracted by 4.3 percent month-on-month in April 2022.

Nonetheless, the overall office vacancy level in Hong Kong was unchanged at 9.5 percent in April versus the preceding month. However, the vacancy rate in East Kowloon remained the highest among all of the city’s office submarkets, increasing to 14.7 percent last month, the highest since November 2021.

Looking ahead, Ong thinks that demand for Grade A offices in Central and Admiralty would be propelled by the East Rail Line Cross-Harbour Extension, which started operating yesterday.

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