Hong Kong Grade-A office market has shown a slight increase in the month of January amidst a slow office leasing activity. This notable activity has been possible due to consolidation and relocation requirements with net take-up raised to 54,300 sq. ft., as per the report Hong Kong Monthly Market Monitor by JLL.
Some of the biggest transactions are from the companies like Alibaba, Valentino and Mayer Brown JSM. Alibaba took about 92,000 sq. ft. space at Times Square in Causeway Bay for its media arm. Valentino leased 1.5 floors and Mayer Brown JSM moved its office in the same building at 41 Heung Yip Road.
In Central, PRC financial services firms expanded and established new offices that results a growth in the occupier market with total office space of 45,100 sq. ft. But during this positive time, the average rent has increased by 1.3 per cent due to limited supply and high PRC demand.
This created a rental gap between Central and alternative office locations that will direct several firms to follow relocation trend and move out of Central in order to reduce the rental costs, according to Alex Barnes, Head, Hong Kong Markets, JLL.
“Like the banking and accounting sectors before it, the legal profession now appears on the verge of being the next industry willing to cut ties with Central,” says Denis Ma, Research Head, JLL. “The sector, which currently accounts for about 10% of the Central Grade A office market, or about 2.5 million square feet, represents as a significant source of rental refugees who are able to absorb above market rents in locations outside of Central.”
Source: World Property Journal