CBRE Publishes the Hong Kong Office MarketView Q1 2016.
Rhodri James, Executive Director, Office Services, CBRE Hong Kongcommented, “The
uncertain economy and the increasingly challenging global banking environment
raise questions over the sustainability of office demand. We have already
noticed more surrender cases, particularly in Central. However, so far these
spaces have been well absorbed due to limited vacancy and the fact that they
are already fitted-out, making them attractive for replacement tenants.”
CBRE Outlook Q2 2016
Occupier activity will be driven by cost
considerations rather than expansions or upgrades.
Mainland Chinese firms, particularly second-tier firms,
will remain a key source of demand for office space in the short term,
particularly in and around Central. However, from a risk management
perspective, landlords may require these tenants to pay premium rentals and
vacancy will continue to support further rental growth in Q2. However, rental
growth for 2016 as a whole will be front loaded in the first half of the year
as there will be more new supply in 2017 and pre-leasing activity will increase
from H2 2016 onwards.
Rents in Central have increased by 5.2% this year and is
expected to see a growth of up to 10% in 2016, while rents in other
districts will increase by up to 5%.
CBRE Highlights Q1 2016
absorption on Hong Kong Island slowed from 40,200 sq. ft. in Q4 2015 to 11,700
sq. ft. in Q1 2016 due to slower leasing momentum and the lack of available
new leasing transactions were for shadow space or pre-commitments to future
vacant space. Companies also became more cost sensitive and took longer to make
continued to be underpinned by insurance companies and mainland Chinese firms.
& New Territories continue to be the subject of relocation demand from
firms presently located on Hong Kong Island.
vacancy remained at 3.5%. Average vacancy on Hong Kong Island stood at 2.6%
while that in Central was unchanged at 1.2%. Vacancy in Kowloon and the New
Territories edged up marginally to 4.5%.
rents rose 2.4% q-o-q in Q1 2016. Hong Kong Island recorded average rental
growth of 3.2% q-o-q, with Central being the biggest contributor (5.2% q-o-q).
Rents (Net effective) /
floor areas mentioned above are Net Floor Areas.
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
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