Hi-tech fallout misses office rental market
Grade-A office rentals on Hong Kong Island rose by more than 10 per cent in the third quarter despite the cutback by some SAR information technology companies, according to C B Richard Ellis (CBRE).
A survey conducted by the property consultants showed Grade-A rents in Central grew by 12.2 per cent in the three months to September 30. Wan Chai rents rose 11.3 per cent in the same period while Island East reported a 12 per cent increase. Average prime rents throughout the SAR rose 8.2 per cent.
CBRE said office demand was not affected by the IT layoffs and consolidation. Overseas IT firms continued to demand quality office space, it said. These companies generally required large areas of space and preferred buildings with up-to-date infrastructure in certain favoured decentralised locations, such as Quarry Bay.
However, the retrenchments by listed IT and dotcom companies in the second quarter did contribute to a deceleration in office rent increases, CBRE said.
Third-quarter take-up in office space also became moderate, at 620,800 square feet.
The vacancy rate continued to fall, with core Central, Wan Chai and Quarry Bay all at about 3 per cent. The Causeway Bay vacancy rate dropped from 10.6 per cent to 6.5 per cent.
The shortage of new office supply, combined with the substantial space requirements of overseas companies, was firmly underpinning the leasing market, CBRE said.
Meanwhile, average luxury residential rents rose 3.9 per cent in the third quarter, bolstered by demand from affluent local occupiers and expatriate businessmen.