Kowloon offices on the other hand will drop by 7%.
Colliers said in a flash report that it expects that overall office rent will continue to grow in 2017. With limited new supply and healthy demand, Hong Kong Island rents should grow by 4%. Wong Chuk Hang, following the opening of the MTR South Island Line and given the availability of quality office buildings, should see rent growth of 19%, similar to 2016.
The Kowloon office market should see a large new supply of 3.1 million sq ft of net floor area, particularly in the Kowloon East sub-market (2 million sq ft). "As a result, we expect that rent in Kowloon will fall by 7%," it said.
Here's more from Colliers:
In short, over 2017 Hong Kong should continue to develop into a two-tier market: Hong Kong Island and Kowloon. Retail rents in prime locations should continue to drop in the low-single digit per cent range in 2017, given our assumption of modestly lower tourist arrivals and spending.
We expect that rents will stabilise towards the end of 2017.
The residential leasing market continues to trend downwards. We expect that the lower-end market, with monthly rental charges of below HKD40,000, will be the most active. The luxury leasing market continues to suffer as multinational companies cut housing allowances and more expatriates move to local packages.
Industrial rents should trend upwards, led by industrial/office (I/O) buildings. Meanwhile, warehouse rents should rise due to better conditions in import and export markets.
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