Central sees space demand drive rises
Vacancy rates for grade-A offices in the heart of Central dropped to less than 4 per cent on growing second-quarter demand, according to Chesterton Petty.
Fuelled by dwindling vacancy rates, rentals surged in the central business district, well ahead of all other major business districts, the property consultant said.
Monthly rentals for prime office space in Central were in the range of HK$55 to HK$66 per square foot on net area, up 60 per cent to 80 per cent in the course of the year.
But leasing activity slowed modestly in the second quarter as a result of the dwindling supply, higher rentals and the bulk of renewals and commitments completed previously.
Chesterton Petty said about 1.4 million sq ft of grade-A space was committed in the second quarter. Leasing demand was expected to remain strong as the pace of recovery in the local economy continued and the anticipated accession of the mainland to the World Trade Organisation drew more foreign companies to Hong Kong.
The consultant said rentals were expected to edge up slightly and vacancy rates to fall marginally this quarter.
Office prices were not expected to post any major rebound unless some unanticipated events boosted investment sentiment substantially in the near future, it said.
Despite the conclusion of a few large transactions, the overall sales market remained sluggish.
However, a few foreign investors were interested in prime properties.
Sales activity grew only marginally while prices continued to consolidate. Prices in Central and Admiralty were marginally up at HK$4,300 to HK$6,500 per sq ft on gross area.