office rents in hong kong increase greatly

Office Rents In Hong Kong Increase Greatly

Rental of office space in Hong Kong have increased greatly and they are now reaching all time highs. Today, the rents of offices in Hong Kong are almost the same as they were when the 2008 financial crisis hit the global economy. The fact that the office rents have increased to immense values is alarming. However, people cannot do much about it and they have no other option but to deal with it.

The fact of the matter is that the rents are increasing beyond capacity because the demand from Chinese companies, as well as the fact that there is low office space, are two things that are pushing the market rents beyond HK $210 per sq. ft. The $210 mark was attained when the Hong Kong economy was hit by the global financial crisis. Moreover, things are no different now as the rent values are increasing beyond the 2008 mark.

Some of the places where the office rents are high are in Central, which is the most expensive place available to the Hong Kong people to rent. It is by far the most expensive place to rent in the world as well.

The core reason as to why there has been a push in Hong Kong office rent is the fact that the demand by Chinese companies has increased so greatly that supply is following through. Because of this, the demand has increased beyond capacity, sending the office rates and rents higher.

According to JLL’s head of agency “There are landlords that are demanding HK $200 per sq. feet”. He also added that such demand was previously seen in 2008, when the global crisis hit the world financial economy.  The highest recorded price then, was HK $210 per sq. ft. but this was 10 years ago. The same time has again come on the Hong Kong economy now, where rents have increased beyond par, driving people with no other option but to rent it at high rates.

During the initial four months of 2018, the average rents of Grade A offices located in Central increased by 1.7%, as they settled at HK $120.7 per sq. ft. These rents are 3% higher than they last increased 10 years back.

On the other hand, the office rents in Prime Towers located in Central are also increasing to 2008 levels. The leasing rates of Grade A1 buildings such as the Cheung Kong Center and IFC are have increased by 1.7% in 2018. They are currently valued at HK $176.7 per sq. ft.

While commenting on the situation, JLL said that they are seeing different mainland securities firms that are trying to get a good spot in high quality offices and buildings. According to the MD of Cushman and Wakefield, John Siu, these buildings will have their rents increasing to HK $200 this year. They are also announcing that they are expanding in Hong Kong this year. These people are also saying that rents are not their main concern right now.

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