Hong Kong Sees 2% Uptick In Prime Office Rents

HONG KONG – Data from property consultancy Knight Frank showed that rents of Grade A office towers in Central and Admiralty edged up by 2.0 percent year-on-year in May, reported The Standard on Tuesday morning (28 June, SGT).

The real estate consultancy said that office rental growth in the two districts outperformed other office submarkets in Hong Kong during the first five months of 2022. These two areas recorded a moderate gain of 0.4 percent thanks to healthy demand for good quality office space in the city’s central business district (CBD).

Office occupants continued to embark on a flight-to-quality amidst stabilized office rents in May, while some sizable firms have created robust take-up for coworking spaces, noted Knight Frank.

The property consultancy has forecasted that more sizable companies could relocate to flexible office spaces or coworking spaces in light of the popularity of flexible work arrangements, including remote working, making it a trend to watch for over the next 12 months.

However, Knight Frank pointed out that office rents in Hong Kong’s decentralized locations are still under pressure, despite prime locations showing bottoming-out signals. For instance, the office vacancy level in Wong Chuk Hang rose to 11.1 percent in May, while that in North Point climbed to 12 percent.

Looking ahead, the real estate consultancy expects overall office rents across the city to recover in H2 2022. In particular, Knight Frank has projected that Hong Kong Grade A office rents could increase by 5 percent to 10 percent for the whole year thanks to improving economic sentiment and a more stable COVID situation.