LettersWhat Hong Kong can do to improve its office occupancy rate

The high vacancy rates of Hong Kong offices, in particular grade A offices, appear to show no sign of easing, according to recent data compiled by property consultancies CBRE, JLL, Savills and Cushman & Wakefield. I understand that this could be attributed to an increase in supply in grade A offices in the core business areas. While there are reportedly cases where companies relocated from noncore areas back to core areas, spurred by competitive rental adjustments in prime locations, unfortunately these relocations are inadequate in suppressing vacancy rates. Some people point out that Hong Kong’s office vacancy rates – at around 13 per cent – align with those in other major cities in the world. However, one should compare the performance changes in a market with the market’s own historical data. As such, the sharp rise in Hong Kong’s vacancy rate warrants concern. Given the post-pandemic changes in our mode of work and today’s cost-conscious tenants, I do not see how the office vacancy rate could be lowered in the short term of six to 12 months. What can be done, then? From the point of view of controlling supply, town planning rezoning could be viable. Areas zoned for commercial use can be rezoned to allow for other uses, such as residential. While this measure would take time and its effect might not be immediate, this systemic change could prevent a repeat of such oversupply in the future. As for the current stock, allowing changes to the user clause in government land leases at a low cost could be useful. Apart from the town planning zoning, the permitted use of a building is also bound by the government lease, commonly known as the land grant, which is a private contract signed between the government and the land owner. If the permitted uses under government lease could be widened from “for office use only” to include “commercial” and other uses, it would allow offices in the noncore areas currently suffering high vacancy rates to seek other tenants. From the point of view of expanding demand, the current policy drive to encourage the setting up of family offices would be helpful, but those tenants might not be able to digest a very significant amount of space. The government should consider more radical changes, such as offering economic incentives to attract sizeable foreign companies to set up offices in Hong Kong. This could kill two birds with one stone, increasing the occupancy rate in offices while raising Hong Kong’s prestige as a base for reputable businesses and trades. Kitty Chan, North Point Early hiccups on mainland travel permit to be expected I was among the 20,000 Hong Kong permanent residents who received a multi-entry travel permit to the mainland, and I just spent 17 days travelling first in Chongqing and then across Xinjiang with it. Using it at the West Kowloon high-speed railway station, I found the process perfectly smooth. Things got a little more interesting when I used it for hotel check-in and domestic flights on the mainland. At the hotels, the travel permit was universally accepted as my check-in ID, with only one also requiring my passport. However, the permit does not seem to work on the same scanning machine as the mainland ID card does. At three separate domestic airports, the experience was varied. At two of the three, the check-in staff seemed perplexed by this new document and needed to get their superior’s approval. The identity check before security caused significant consternation at two of the three airports; in Chongqing, I counted five different officials needing to be consulted before getting the green light. I was travelling with a group, many of whom were using their passports, and I can say that the new permit does simplify the process. The permit is new to the mainland, so it’s not surprising there are some hiccups. I think it’s safe to say that with time and familiarity, this will become ho-hum in the future. Bob Rogers, Sai Kung Name change won’t ease South China Sea tensions As Malaysia gets ready to assume the Asean chair next year, a lawmaker in Malaysia recently suggested that it should rename the South China Sea – to, for example, the Malay Sea – to fend off China’s attempt to claim the South China Sea for itself. If only it was that simple. We can try to change the name, but there is no point if we end up being the only ones to use the new name and the rest of the world does not follow suit. The names of a geographical feature are usually determined either by those who are powerful or by the agreement of many. Malaysia, the incoming chair of the Association of Southeast Asian Nations, is no world power and not even a regional power. There is a general consensus that China and the West are on a collision course, and that the collision could happen in the next few years. We can expect China to be even more assertive in the South China Sea. Rather than a confrontational approach with China, Malaysia should consider taking a more cooperative approach. The Chinese are an ancient civilisation with an ethical code, and if we negotiate with them on that basis, there is no reason why we can’t secure a fair and beneficial arrangement with the Chinese. We should see what China has to offer rather than too quickly presume that we are going to be subjected to unfairness and oppression. Nehru Sathiamoorthy, Subang Jaya, Selangor, Malaysia