In 2018, Hong Kong Class A Office Rents will continue to rise.
According to JLL's monthly Property Market Monitor, Grade A office rentals in Hong Kong increased by 0.7 percent month over month in August, with Wanchai/Causeway Bay seeing the most growth, up 1.0 percent month over month, on the strength of strong demand. qatar houses
Office rentals in Grade A1 offices in Central Hong Kong increased by 1.6 percent m-o-m, owing to a tight vacancy situation, while rents in Central increased by 0.9 percent m-o-m. Despite a 51 percent decline in new lettings in Central over the previous month, rents were able to rise. Finance-related businesses, on the other hand, remained active and sought to expand in the traditional CBD. BitMEX, a cryptocurrency trading platform, is said to have leased the entire 45th floor at Cheung Kong Center for a monthly rent of HK$225 per sq. ft, a new high for the skyscraper.
In August, the completion of South Island Place added another 307,200 square feet of Grade A office space to the market in Wong Chuk Hang. However, returning space in Kowloon East countered the realization of pre-commitments in the project, resulting in a net take-up of only 28,300 sq. ft. in the total market for the month. With around 452,000 square feet of space in Kowloon East set to be relinquished due to lease expiration over the next 12 months, net take-up in the entire market is projected to remain low in the immediate term.
JLL's Head of Markets, Alex Barnes, stated, "Despite an increasing trade war between the United States and China, the market remains strong due to supply and demand fundamentals. While Grade A office rents rose in most submarkets during the month, Kowloon East's rise is projected to be slowed in the months ahead due to a flood of new office supply and high levels of vacancy. Nonetheless, the increase in supply in Kowloon East should provide an opportunity for residents looking to relocate."
Denis Ma, JLL's Head of Research, stated, "Home sales fell 21% m-o-m in August, to a five-month low, as a result of the government's recent housing efforts and the rising trade tensions between the US and China. Nonetheless, the primary sales market is holding up well as developers adopt less aggressive pricing techniques, which is attracting purchasers."
Rent growth in Hong Kong's Class A offices is slowing.
Demand for Hong Kong's Central District Offices is decreasing.
Rents in the overall Grade A office market continued to climb last month, though at a slower pace, according to JLL's monthly Hong Kong Property Market Monitor. In October, the average rent for Grade A offices increased by 0.5 percent month over month, compared to 1.0 percent month over month in September 2018.
The amount of surrender space in October increased to 337,000 sq. ft., indicating that leasing demand in Central is weakening. The decision to surrender was made primarily due to the need for relocation. Banking and financial services organizations, on the other hand, remained engaged in the market. After leasing five floors (59,4000 sq. ft.) at Three Exchange Square to suit growth ambitions, China Merchants Bank will relocate. HNA had previously rented the space.
JLL's Head of Markets, Alex Barnes, notes, "In October, tenant relocation to decentralized regions, particularly Hong Kong East and Wong Chuk Hang, boosted net absorption in the total Grade A office market to 188,100 sq. ft. The Kowloon East office market profited from the trend as well, with rents increasing by a market-leading 1.0 percent month over month in October. More decentralizing tenants selected higher-quality office buildings, resulting in a 1.3 percent m-o-m increase in Grade A1 offices "ldings," says the narrator.
Denis Ma, the Head of Research at JLL, added, "Against the background of a plunging stock market and growing trade war fears, investment volume remained sluggish. Nonetheless, a number of smaller Grade A office premises sold at exorbitant prices. A 2,930-square-foot condo on the 30th floor of 9 Queen's Road Central was purportedly sold for HKD 163.5 million, or HKD 55,800 per square foot, according to reports."