This is due to sustained demand from PRC and financial services firms.
Robust demand from Chinese and financial services companies will continue to drive Central prime office rents upward by as much as 5% in 2018, according to a news release from JLL.
Overall vacancy rate at the end of the November stood at 4.8% although new supply pushed vacancy rates higher in Tsimshatsui and Hong Kong East in the second half of the year.
Central retains the tightest vacancy rate at 1.9% with PRC banks and co-working operators amongst those actively expanding in the office space with the former accounting for 48% of new Central lettings this year and the latter leasing about 600,000 sq ft in the commercial office market since 2011.
“There will be 2 million sq ft of new commercial Grade A office supply completed in the market next year but this new supply is unlikely to have a significant impact on the Central office market given the lukewarm response of PRC companies to consider decentralised locations. Outside of Central, however, this new supply is likely to weigh on rentals. As a result, we expect rents in most other submarkets to remain largely flat while those in Kowloon East to decline in the range of 5-10% owing to the elevated levels of vacancy,” said JLL head of HK markets Alex Barnes.
Photo from Mstyslav Chernov - Self-photographed, http://mstyslav-chernov.com/, CC BY-SA 3.0
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