Investment options lie in key office space markets in Hong Kong
Expert from CBRE believes Hong Kong office spaces continue to maintain their competitive edge over other Asian cities.
Recent data has shown a significant dip in real estate investment in Hong Kong, primarily attributed to rising interest rates.
To shed light on this 14-year low property investment and the current state of Hong Kong's office space market and its prospects, Hong Kong Business interviewed Bevis Lo, director of Advisory & Transaction Services-Office Services at CBRE Hong Kong.
In response to the question of which locations and specific properties firms should consider when leasing new spaces, Lo emphasised the importance of tailoring choices to the specific business sector.
“It really depends on the business’s needs,” he said.
For financial institutions, banking, finance, and private equity, central and Admiralty continue to be key areas. Conversely, businesses in the FMCG, telecommunications, pharmaceuticals, or trading sectors may find Eastern Hong Kong Island, including Wanchai, Causeway Bay, Hong Kong East, and even Tsim Sha Tsui or Kowloon East, more suitable.
Lo also highlighted the age factor in Hong Kong’s buildings, noting, “Hong Kong buildings, typically on average, they're around 30 years old.”
This factor prompts some businesses to seek “flight to quality.” The eastern areas of Hong Kong Island, such as Hong Kong East and Kowloon East, offer newer buildings with median ages of 10 to 15 years, making them attractive emerging markets for discerning occupiers.
Addressing the question of how Hong Kong can maintain its appeal to foreign firms looking to establish offices or headquarters in the city, Lo pointed out, “Hong Kong still remains having a very competitive edge over other Asian cities.”
He underlined the city’s strategic geographic location, connecting to mainland China and offering short travel times to other Asia Pacific cities, as a crucial factor in maintaining its allure.
Lo emphasised the importance of landlords aligning with occupiers’ needs, saying, “It’s all about asset management, maintaining the older buildings in a tenable condition.” This approach further cements Hong Kong’s competitive edge over other Asian cities.
Whilst high interest rates have stalled many property transactions in Hong Kong, Lo believes that the city remains to have a “very competitive edge over other Asian cities.
“Geographically, we’re in a very, very good position. We’re connected to China. Also, flight time and travel time to other Asia Pacific cities is very, very close,” said Lo.
Pointing out the dynamic nature of Hong Kong’s office space market and its adaptability to the diverse needs of businesses, Lo said the city continues to evolve, but remains a prime destination for global firms seeking strategic footholds in the Asia Pacific region.
Additionally, as businesses evaluate their options, he said considerations about sector-specific needs, flight to quality, and collaboration between stakeholders also remain key factors in making strategic leasing decisions.
For more insights and news about Hong Kong's business landscape, visit hongkongbusines.hk.