Hong Kong Office Space Agents
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Hong Kong Office Market Forecast

April 2018
Overall prime rates in Central advanced marginally last quarter by around 1.4% QOQ and despite the low vacancy rate that rate of growth has slowed. This is because rents are already at record highs, with top prime rates ranging from HK$145 to HK$200 per sq ft per month, net effective. Trading initiatives such as the Shanghai – Hong Kong and Shenzen- Hong Kong Connect Schemes will encourage demand in Central from PRC financial firms.


The best value for money is still found in Island East and Island South

 

In general, prime rates in Greater Central (CBD) average around $125 per sq ft. This drops off to around $70 per sq ft average for the premium buildings in Wan Chai/ Causeway Bay. The best value for money is still found in Island East and Island South, where the better quality buildings average around $47.00 per sq ft and $32.00 per sq ft respectively.

Kowloon East has been surprisingly resilient over the past few quarters, given the amount of supply and remains stable at around $30.00 per sq ft. The main competition to Kowloon East is still Island East but because this location has comparatively low vacancy rates, the rental gap continues to be around $20.00 per sq ft, making Kowloon East 40% more competitive.

The vacancy rates in the three core office districts (Central/ Admiralty/Sheung Wan) are already at record lows and are expected to tighten still further in 2018. With continued demand in the Central Business District from PRC financial firm expected to remain unabated, we foresee rates could advance around 7% in the Greater Central area and around 4% overall. The banking and financial sectors and the TMT sector (Technology /Media / Telecom) will continue to be the strongest influences on rental growth.