Sluggish Hong Kong office-rental market shows signs of bottoming out as enquiries pick up, analysts foresee rising rents
- Rents are expected to edge up by the end of the year, according to market players
- The office vacancy rate stood at 14.4 per cent last year, the highest since 1998
Hong Kong’s depressed office-rental market is showing signs of bottoming out, with agents fielding more leasing enquiries and rents expected to edge up by the end of the year, according to market players.
The reopening of the border with mainland China has resulted in a significant increase in enquiries, according to Hongkong Land, Central’s biggest landlord.
“Leasing has been quite active recently,” agreed Fiona Ngan, head of office services at Colliers. “Landlords have greater confidence and are panicking less.”
At the beginning of the year, the market was still difficult “since we needed to recoup previous losses in the last three years of the pandemic”, Ngan added. “Market sentiment should improve at year’s end.”
In the last three years, overall office rents have sunk 22 per cent, she said, adding that the decline has slowed this year, with rents dipping 0.8 per cent overall as of late March. Rents may edge up about 3 per cent this year, she added.
Hong Kong’s overall office vacancy rate stood at 14.4 per cent last year, the highest since 1998, according to the Hong Kong Property Review 2023 published by the Rating and Valuation Department on Friday. In Kowloon East, vacancy rate amounts to as much as 20 per cent, though rents edged up in the fourth quarter, said Colliers’ Ngan.
