Hong Kong’s office rents reach new highs

PETALING JAYA (Dec 2): Hong Kong has the world’s highest rent for premium office space in 2016, taking a significant lead from two other global cities, London and New York, according to international real estate consultancy JLL.

JLL’s latest Global Premium Office Rent Tracker report states that the price of premium office space — Class A buildings with excellent facilities — in Hong Kong’s Central district is more than 50% higher than rates in London and New York.

It costs US$302 (RM1,344) psf each year to rent space in a top-notch building in Hong Kong — a new high for the city compared with US$262 in 2015, alongside US$197 psf in London’s West End and US$194 psf in Midtown, New York.

Rent prices were pushed up due to strong demand and shortage of stock as companies from mainland China look for bases in Hong Kong.

“Hong Kong’s Central district is being reshaped as western banks and financial institutions downsize or move out due to global challenges such as slower economic growth and increased compliance and regulations.

“Mainland Chinese wealth and asset companies are moving in as they seek to boost their presence in Hong Kong. This demand is expected to continue with the launch of the Shenzhen-Hong Kong Stock Connect programme in December,” said JLL head of research for Asia Pacific Megan Walters in a statement

She added that the market is also set to get more fragmented since the initial requirement from these companies is usually less than 5,000 sq ft.

“This could prove challenging for both tenants and landlords for the long term,” added Walters.

Meanwhile, Beijing, Tokyo and Shanghai are in fourth, fifth and sixth place, respectively. Malaysia’s neighbour in the south, Singapore, is in 18th place, after a rental correction with more office space supply in the island republic, said JLL.