Established ones will be sought after.
In the Grade A office market, it is expected that landlords/developers and occupiers will focus more on emerging office submarkets.
According to a research note from CBRE, in addition to the opening of the MRT South Island Line (East) in late-2016, which will enhance the viability of Wong Chuk Hang as a decentralised office hub, the government will close the tender for the first commercial site in Kai Tak in November.
The site, which has more than 1 million sq. ft. of GFA and enjoys close proximity to the future Kai Tak MTR Station, is expected to draw strong interest.
Here's more from CBRE:
In a market where cost-saving is the top priority, space in the more established decentralised submarkets will remain keenly sought after. The sizable volume of new and secondary space in Kowloon East, for example, will continue to provide feasible options for midtown occupiers currently in Wan Chai, Causeway Bay and Tsim Sha Tsui.
Such tenants are highly cost driven and are typically more flexible towards their location than many Central-based occupiers who have a strong attachment to the CBD.
Banks in Greater Central looking to relocate usually move to Hong Kong East rather than to other submarkets on Hong Kong Island. CBRE Research therefore believes landlords in midtown locations will have to become more flexible over the next 6-12 months to prevent a major outflow of tenants.
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