A number of prominent real estate services groups are reporting robust demand for office space in Hong Kong, as a range of businesses look to strengthen their position in what is an increasingly important strategic location.
Knight Frank and Savills revealed recently that a company called Excel Fine Holdings had bought a floor of office space at 99 Queen’s Road Central in downtown Hong Kong for a record HK$25,581 (US$3,300) per square foot.
According to data from CB Richard Ellis released earlier this year, the costs associated with occupying office space in Hong Kong are higher than anywhere else in the world, with the exception of London’s West End.
Financial services firms are among the businesses most keen to establish a sizeable presence in Hong Kong, with economic recovery helping to boost prime office rents across the city and both HSBC and Barclays expanding in the region in recent months.
“The low interest rate and hot money situation in Hong Kong mean the robust trend will continue in the office property sector,” Dominic Chung, a senior director of investment properties at CB Richard Ellis, told Bloomberg.
A report from DTZ earlier this month suggested that demand for office space to rent in central London is on the increase, with financial districts proving particularly sought after.
The UK capital was also recently rated as the best city in the world in which to do business by the Cushman and Wakefield commercial property company.
Editor’s notes: An article released in April 2023 stated that the office space vacancy rate across Hong Kong stood at 14.4% in 2022 which was the highest it had been since 1998.
Social unrest in 2019 followed by the effects of the pandemic from 2020 has created great pressures for the Hong Kong office market.
However, agents across the market felt that the depressed office rental market was showing signs of bottoming out.
Since the border with mainland China had reopened, office leasing enquiries increased significantly.
The increased activity indicated that rental levels may increase up to 5% over 2023 from their current levels of HK$109 per square foot per month in Prime Central in Hong Kong and HK$55 per square foot in Wanchai and Causeway Bay.