Central strongest performing Hong Kong office property submarket in Q2

Thanks to the banking and finance sector.

In Hong Kong's office property segment, leasing demand continued to be largely supported by smaller requirements in Central, but it was the strongest performing submarket in the second quarter of 2014 with net take-up amounting to about 79,600 sq ft (net).

According to the quarterly summary on the Hong Kong property market (2Q14) by JLL Hong Kong, Central's performance was largely on the back of expansion and relocation requirements from the banking and finance sector.

The report also noted that a subdued leasing market contributed to net take-up amounting to just 15,500 sq ft (net) in 2Q14, down from 303,200 sq ft (net) recorded in the previous quarter.

Here's more from JLL Hong Kong:

Increasing competition from industrial building refurbishment projects and landlords shifting properties from the sales to leasing market led to rental decline in Kowloon East. All other office submarkets, however, recorded slight rental growth.

Two government sites were made available for sale via public tender in 2Q14. First Group Holdings won the tender of a site in Cheung Sha Wan for HKD 1.0 billion (AV HKD 5,177 per sq ft, gross).

A second site, located at 15 Middle Road in Tsimshatsui with a site area of 28,309 sq ft and maximum buildable GFA of about 339,700 sq ft was put on the market on June 27.

Citigroup purchased the East Tower of One Bay East in Kwun Tong from Wheelock Properties for a record HKD 5.4 billion (HKD 10,600 per sq ft, gross), marking the largest single office transaction in the city.