Hongkong Land Sees Lower Office Rents In HK; Higher In Singapore
HONG KONG – Hongkong Land, a major office landlord in the Chinese territory, recorded negative rental reversions for its Hong Kong office assets amidst lower market rents, according to a bourse filing published last week.
In H1 2022, average monthly office rents for its Hong Kong office portfolio fell to HK$112 psf compared to HK$118 psf during the first half of 2021 and HK$115 psf six months ago.
“In Hong Kong, anti-pandemic measures introduced in the early part of the year impacted the number of new office leasing enquiries and resulted in the group providing rental support to a select number of retail tenants,” stated Hongkong Land in its filing.
“Despite these challenges, the group’s Central office portfolio continued to benefit from a flight to quality, as a number of new tenants committed to long-term leases.”
However, the physical vacancy rate of its Hong Kong office space increased to 5.4 percent at the end of June 2022 from 5.2 percent at the end of December 2021. On a committed basis, the vacancy level edged up to 5.1 percent from 4.9 percent previously.
On the other hand, Hongkong Land’s office portfolio in Singapore continued to benefit from robust office rental momentum. In fact, average monthly rents of its office assets there climbed to S$10.5 psf in H1 2022 from S$10.2 psf in H1 2021 and S$10.3 psf in H2 2021.
On a committed basis, the vacancy rate of the group’s Singapore office portfolio remained low at 3 percent versus 2.9 percent at the end of 2021.