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The continuing financial crisis within the eurozone has had an impact on conditions within the Hong Kong office market, according to a new report.
Cushman & Wakefield delivered an expansive report on the state of office space markets worldwide this week and noted a relatively subdued level of activity in the heart of the Chinese city.
Hong Kong is known as a crucial global hub for banking and financial services companies, many of whom saw their operations and profits impinged considerably in 2011 as European economies struggled to maintain growth and deal with their public debt problems.
Among the long list of ramifications for commercial property markets worldwide was that Hong Kong offices saw relatively restrained demand for new space. Although, the city retained its position as the most expensive location in the world in which to rent Grade A office space.
“The Hong Kong office market, especially the activity in Greater Central (CBD) was very much affected by the credit crisis in Europe in the second half of 2011,” said John Siu, executive director in Hong Kong for Cushman & Wakefield.
“Banking and finance occupiers in particular have become very cautious about their office expansion and relocation plans. As a result, landlords are now more willing to offer additional rental incentives to retain tenants in their buildings and attract new tenants,” he said.
Elsewhere in China however there was a different story, with rising demand pushing up prices significantly in Shanghai and particularly in Beijing over the course of 2011.
Second on the list of the world’s most expensive office space markets behind Hong Kong was London’s West End, where Cushman noted a lack of high quality premises being made newly available for rent.
Another headline grabbing shift in office market trends highlighted by the new report was that the cost of renting offices in Beijing surpassed the typical prices being paid in New York City.