See available office space to rent in Hong Kong
CB Richard Ellis and the investment banking group Daiwa Capital Markets produced the study that claims the eight million square feet of Grade A office space currently in the supply pipeline is well short of what the city needs. Based on projected economic growth, the authors of the report estimate that Hong Kong will need roughly 17 million sq ft of top-quality new offices to satisfy demand over the next eight years.
According to the report, failing to deliver the office space that major corporate businesses need to operate as they would like in Hong Kong could cost the city its status as the go-to destination for international firms in Asia. While development space is clearly in short supply across the city, CBRE has highlighted a number of areas that could feasibly be used to create new high-quality office buildings in years to come.
“We believe there are solutions at hand to help plug the shortfall and see the seven sites totalling nine million sq ft of new supply proposed in the report as a ‘can do list’ and not a ‘wish list’,” commented Craig Shute, senior marketing director for CBRE in Hong Kong. We strongly urge private developers and the government to come together to fast-track these areas.”
Daiwa Capital Markets’ managing director and regional head of product management, John Hetherington, said: “Developing a further nine million square feet would certainly be an extremely costly endeavour. It would cost an estimated HK$37 billion from the private sector just to acquire the seven government sites recommended by CBRE and Daiwa, and a further HK$23 billion for development.”
For the past two years, Hong Kong has topped Cushman & Wakefield’s list of the world’s most expensive places to rent office space. The West End of London is also included in the list.
Editor’s notes: In the first quarter of 2023, the vacancy rate within the Hong Kong office space market stood at 14.4% – the highest since the 1990s, and rental values were expected to increase by 5% over the year
In Q1 2024, the overall vacancy rate for Grade A offices in Hong Kong was 13.1%. The total vacant office space currently stands at 14 million sq ft.
Hong Kong was struggling with oversupply and weak demand, and a report by Savills predicted that office rents would decrease by between 5 and 10% over 2024.