They committed to 300,000 sqft in the first half of the year alone.
Companies from Mainland China are refusing to loosen their hold on Hong Kong’s office sector as they have committed to around 300,000 sqft of floor area in the first half of the year alone, stoking rents to even greater heights, according to a report from real estate consultant Savills.
The half-year Chinese office letting figure represents more than half of the total floor area committed by PRC firms in 2017.
Around 80% of the committed floor area is situated in core districts like Central, Admiralty, Sheung Wan, Wanchai, Causeway Bay and Tsim Sha Tsui despite higher rents. The rest of Chinese capital are located in Mong Kok, Kowloon Bay and Kwun Tong.
A separate report by Cushman & Wakefield notes that Hong Kong has beat US and the UK as the top destination of Chinese property capital in April-June. with transaction volumes ballooning 155% YoY to US$3.4b.
The bulk of Mainland companies eagerly snapping up Hong Kong office space still came from the financial services sector with Pudong Development Bank pre-leasing over 73,000 sq ft at One Hennesy, a redevelopment project that’s expected to be completed by 2019.
However, there has been a more diverse leasing demand from Chinese firms in industries like real estate, healthcare and online platforms, noted Savills.
In response to heated demand, more offices are being set up with 1 million sq ft of floor area to be released into the market with the upcoming launch of One Taikoo Place and South Island Place this year which counts KPMG amongst its reported tenants, in 2018.
730 King’s Road, which can provide around 440,000 sq ft of floor area, is expected to be completed by 2019.
“Of the 2.12 million sq ft of new Hong Kong island supply over 2018-2019, only 800,000 sq ft remains available after high levels of pre-commitment,” Savills noted.
Hong Kong is expected to retain the rapt attention of Chinese investors for the second half of the year, along with other countries linked to the Belt & Road initiative as trade tensions escalate, added Cushman & Wakefield.
Photo from WiNG - Own work, CC BY-SA 3.0
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