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Tenants ‘considering options’ as prices rise on office space in Hong Kong

[Published December 2010 and updated May 2023] Many of the tenants in office space in Hong Kong’s central business district are considering their options amid dramatic rises in the cost of occupancy, according to reports.

The cost of renting office space in the most sought-after areas of the city has risen sharply in recent months as many of the world’s major banking groups recover from the financial crisis, and the dynamic is causing several high-profile occupants to start considering other alternatives.

Businesses like Allianz Global Investors and PriceWaterhouseCoopers (PwC), which are both renting large areas of Hong Kong office space, are now weighing up whether buildings outside the CBD might offer more affordable and appropriate solutions, Bloomberg reports.

The pace of rental growth in Hong Kong office space has been dramatic in recent months, with CB Richard Ellis suggesting rents in the CBD increased by as much as a third year-on-year, earlier this year.

Such sharp rises are even thought to be putting the squeeze on major banking and insurance firms as the buildings in the busiest areas of the city have begun offering rents that are the second most expensive to be found anywhere in the world.

A growing number of businesses “are going to be reviewing their cost base as a result of rising rents in Central,” Rhodri James, an office services executive with CB Richard Ellis in Hong Kong, told Bloomberg.

“Some of them will be moving all or part of their operations to more cost-efficient buildings outside the area,” he added.

Three of the four most expensive cities for office space rents are now to be found in the Asia Pacific region, with Hong Kong, Tokyo and Mumbai out-priced only by the West End of London, according to CBRE’s latest data.

Editor’s notes: According to JLL’s Premium Office Rent Tracker, in 2022, the Central district in Hong Kong was the most expensive area in the world to rent office space at US$259 per square foot per year, followed by Midtown in Manhattan, the West End in London and then Finance Street in Beijing, reaching $220, $182 and $167 per square foot respectively.

Tokyo’s Marunouchi district was the 17th most expensive location to rent office space in 2022 at $103 per square foot and Mumbai’s SBD BKC district was 21st on the list commanding $97 per square foot per annum.



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