Hong Kong logs highest occupancy cost in APAC: Knight Frank

The occupancy cost in the city stood at $1,249.89 per square foot per year.

Hong Kong recorded the highest occupancy cost in the Asia-Pacific region, with $1,249.89 per square foot per year (US$159.63) in the first quarter of 2024.

This was amid a downbeat office market due to “a decentralisation bias, as prime vacancies hovered above 20-year highs,” Knight Frank said in its “Asia-Pacific Q1 2024 Office Highlights” report. 

The agency said the prime office vacancy rate in Hong Kong stood at 11.8% and will increase in the coming months as prime rent declines. 

Knight Frank said the 1Q24 prime rental growth rate fell 9.5% to $93.90 per square foot per month compared to 1Q23. It was also down 1.7% versus the previous quarter.

Regionwide, prime rents fell 3.2% compared to the previous year, marking the seventh consecutive quarterly drop due to deepening rental declines in Chinese Mainland cities, which reached record lows during the quarter.

“Although weaker in Chinese Mainland markets, we expect this recurring flight-to-quality theme to intensify as occupiers seek quality assets to optimise portfolios, experiment and evolve their hybrid work plans and hit ESG targets,” said Tim Armstrong, global head of occupier strategy and solutions at Knight Frank.
 

US$1=HK$7.83