Hong Kong Office Space Agents
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Hong Kong Office Market Forecast

October 2017
The chronic lack of supply in the prime Central Business District continues to distort rental levels, which have been boosted by scarcity value and allows landlords to take advantage of the limited alternative options available. 

Prime rates now surpass the previous high in 2008 prior to global crash

 

Average prime rates in Central have reached around $130 per sq ft which surpasses the previous high set just before the Global Financial Crisis in 2008. We expecte rates to advance further over the next 12 months by around 3% - 5%.

The ‘knock on’ effect of rising rates in Central has caused rents to firm in Wanchai. What was $45.00 psf here last year is now around $55.00 psf. Causeway Bay is also growing steadily and averages around $60 - $70 psf. Island East remains stable. Island South is the up and coming location with most tenants comparing the benefits of this location to Kowloon East and rates have firmed from $22.00 psf last year to around $28.00 - $30.00 psf now. 

Across the water, rates in Hung Hom have advanced 12% in the last 12 months, competing directly with Tsim Sha Shui, which is still 20% more expensive despite most buildings here being older stock. Kowloon East is still coming to terms with the flood of new supply, the challenges of leasing extra-large floor plates and competition from Wong Chuk Hang. Hence we expect rates to soften by around 5% over the next 12 months.