Reduced Office Space Demand Will Eventually Increase Rental Competitiveness – Alex Barnes, Head Of Markets, Jll Hong Kong

HONG KONG – Alex Barnes, the Head of Markets for JLL Hong Kong, has opined that the dwindling demand for office spaces in Honk Kong, as well as in other parts of Asia is inevitably leading to competitiveness for office rentals, seeing that numerous companies would take advantage by resorting to expansion for the sake of the future of their businesses.

That is, regardless of the present global economic mayhem sponsored by the rapid spread of the Covid-19 pandemic, companies are likely to scramble for business or office space opportunities once the wave of the virus starts to fade off.

He said: “Leasing demand in Hong Kong’s office market will remain subdued in the second half of 2020 due to a weakened economy. However, lower rents will increase the city’s competitiveness and encourage more tenants to open offices and expand their operations when the time is right.”

There’s no doubting the impact of the pandemic on global economies. However, after the second half of the year, rent prices are likely to remain low, attracting companies to scramble for office spaces in the worldwide bid to bounce back from the impoverishments caused by Covid-19.

Barnes also said, “Secondary listings may not immediately result in these companies taking on large office spaces, but the downstream business opportunities for ancillary finance and business services will support overall business and ultimately, the office market.”

Roddy Allan, JLL’s Chief Research officer for the Asia Pacific also affirmed the realities of the ongoing waning effects of the Corona Virus Pandemic on the demand for office spaces but forged ahead to clearly point out that temporary phases such as these are bound to give way.

“While flexible work arrangements will become more mainstream,” he said, establishing his belief in the continuous need for office spaces, “the offices will continue to play a central role in defining company culture, creating a shared purpose, and meeting employee needs for personal and professional fulfillment.”

With mainland Chinese firms like Alibaba and ByteDance now rallying back to Hong Kong for rentals, it appears to be getting clearer why these Hong Kong real estate experts are certain of the never-ending need for office spaces in Hong Kong’s business districts.

Property companies and developers like China Minsheng Bank, Orient finance Holdings, CMB International Capital, and KWG are reported to have acquired newer offices in Hong Kong, a welcome development for office rentals in the region.

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