Office Rents In Hong Kong’s Prime Central Down 3.6% In H1 2023

HONG KONG – Data from Cushman & Wakefield (C&W) showed that average monthly office rents in Prime Central, which consists of 12 office properties in the city’s commercial heart, fell by 3.6 percent year-to-date to HK$102.50 psf at the end of the 2nd quarter, reported Mingtiandi on Sunday afternoon (9 July, SGT).

In Greater Central, which includes the areas of Central, Sheung Wan and Admiralty, office rents declined by 3.7 percent to HK$88.60 psf over the same period.

At Greater Tsim Sha Tsui, which consists of Tsim Sha Tsui, Hung Hom, Tsim Sha Tsui East, and Kowloon Station, office rents dropped by 3.9 percent year-to-date to HK$44.50 psf.

As for Hong Kong East, which encompasses North Point, Taikoo Shing, and Quarry Bay, it recorded the highest rental contraction over the period of 6.4 percent to HK$41.40 psf per month.

Consequently, overall office rents across Hong Kong at the end of Q2 2023 averaged HK$50 psf, a whopping 34 percent plunge from the HK$75.90 psf all-time peak registered in April 2019.

However, Cushman & Wakefield’s Head of project and occupier services for Hong Kong, John Siu, said that a rebound in office rents is being hindered by an incoming large office supply that will add to the existing high availability, on top of the sluggish office leasing activity.

The real estate consultancy stated that a significant recovery in Hong Kong’s office sector has yet to materialise as office rental activity by mainland Chinese companies have failed to meet expectations after the border reopening in February 2023.

“In terms of new leasing transactions, the share of new transactions by area across business sectors was distributed more evenly in Q2,” noted Siu.

“While the banking and finance sector still accounts for the largest share of newly leased space (at 25 percent), the medical/health/beauty, consumer products/manufacturing and insurance sectors have each contributed more than 10 percent.”

Among the biggest office rental deals in Q2, Citigroup leased an additional 28,500 sq ft of net floor area at Three Garden Road in Central, while insurer FWD occupied 49,000 sq ft of office space at Devon House in Taikoo Place and 11,200 sq ft at Two Pacific Place in Admiralty.