Hong Kong Office Space Agents
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Hong Kong Office Market Forecast

May 2017
The chronic shortage of available office stock has been the main driving force behind advancing rentals, even when demand in general has been lackluster. The top prime market, rates now average around $135.00+ psf, is likely to be continued to be supported by new mainland firms arriving in Hong Kong.

Still a chronic shortage of available office stock

 

Continued tight supply in the prime market could lead rates to advance a further 4% throughout 2017. Elsewhere many multinational companies continue to ‘right-size’ in order to reduce costs and we expect rates across the rest of the Island to stay flat. Wong Chuk Hang however may see a growth in rates around 20% because of the quality of stock coming online, improved facilities and starting from a low base.

On the Kowloon side, leasing activity has been modest and with nearly 2 Million sq ft of new supply coming online during the course of 2017, rental rates are expected to fall. Effective rates in Kowloon East average around $35.00 per sq ft and these could soften by around 5-10% over the next 12 months.

With the limited choice of space available on Hong Kong Island at the moment many tenants are reconfiguring their current space to accommodate their latest needs, either giving up part if rightsizing or absorbing pockets of space available in their current building if expanding.

However, there comes a time when the tenant simply has no choice but to move to more efficient space and many will be waiting until the new schemes arrive later next year, which in turn should free up established space.