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Hong Kong property
Business
Alex Barnes
Concrete Analysis
Alex Barnes

Covid-19 has provided Hong Kong property developers with opportunity to evolve world’s most expensive office market

  • Hong Kong is at the beginning of a significant and fundamental real estate change
  • Central is at no risk of losing its place as a high-end business district, or the most expensive

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Central remains and will continue to be a prime and well sought out location. Photo: James Wendlinger
Alex Barnes
Alex Barnes is head of Hong Kong markets at JLL

A long-term trophy among global property markets, Hong Kong has needed a myriad of external events to accelerate long-awaited changes in real estate.

Hong Kong’s high office rents and low vacancy rates have consistently made news headlines. More recently, this has changed to significant rental declines, pushed by economic challenges and Covid-19. But even with year-to-date adjustments in rents amounting to more than 20 per cent declines in average rentals, according to JLL research, Hong Kong Central remains the most expensive place globally to rent an office.

And despite a less than 9 per cent vacancy rate for the whole of Hong Kong (not at all dramatic in most global markets), the city is at the beginning of a significant and fundamental real estate change. A change that will ultimately benefit the structure of the city and the working relationships of many of its occupants.

Decentralisation has been a well-documented trend for years, and one that bucks the high price tag in nearby districts. Despite this, Central is at no risk of losing its place as a high-end business district, or the most expensive. It remains and will continue to be a prime and well sought out location, but increasingly for smaller, high rent paying businesses, when compared with emerging core districts. It is clear that Central is no longer the only location its traditional occupants will consider.

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