Hong Kong office space the most expensive

PETALING JAYA (Sept 23): Skyscrapers in Asia Pacific experienced the highest rental growth in 1H2016 as Hong Kong skyscrapers continue to be the most expensive, according to international real estate services firm Knight Frank’s 2017 Global Cities report.

“Across the 24 cities tracked, Shanghai recorded the highest rental growth of 7.6% in 1H2016, followed by Sydney (6.5%), Hong Kong (5.9%) and Taipei (5.7%).

“Singapore sits at the bottom of the chart with a decline of 7%, attributed to significant new supply and a slowdown in the local economy,” said the report. Knight Frank defines skyscrapers as commercial buildings of more than 30 storeys.

According to the report’s Skyscraper Index, Hong Kong continues to tower above the rest of the global cities, costing tenants over US$278.50 (RM1,151.30) psf annually while Kuala Lumpur’s skyscrapers are one of the cheapest, with an average rental of US$34.16 psf annually.

“Hong Kong’s prime office rent is significantly higher than New York’s, the runner-up on the Index, where rents in Manhattan have reached US$158 psf,” commented Knight Frank’s Asia Pacific head of research Nicholas Holt at the launch of the report yesterday.

The report also examined how much prime office space investors can acquire for US$100 million in the world’s leading cities where of the 30 global cities analysed, Hong Kong again tops the list as the costliest city to own a prime central office space.

“Three of the five costliest cities globally are in Asia Pacific, with Hong Kong boasting the highest capital values for prime central office space, followed by Tokyo and Singapore,” said the report.

Meanwhile, the report’s prime office rents forecast from 4Q2015 to Q42019 shows that Asia Pacific’s markets have a huge range of growth prospects, with Sydney projected to see the strongest growth of 27.5% and Singapore the weakest with a forecast rental decline of 14%.

Kuala Lumpur and Beijing are also expected to experience negative growth at -1.1% and -4.4% respectively, while Shanghai is the only Chinese city that is forecasted to have a positive growth of 19.2%.

“Sydney and Melbourne continue to see diversified demand drivers, as the Australian economy continues to show resilience despite a slowdown in demand for commodities; while Shanghai has boomed on the back of the strong growth from tech companies,” said Holt.

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