Strong demand triggers Central rents surge
Strong demand in the office market has lifted rents in Central above their pre-crisis peak of three years ago.
'Half-yearly growth in rentals for all districts was between 13 and 21 per cent,' Mark Price, head of business space for greater China for property consultancy DTZ, said. 'Rentals have rocketed on the basis of growing demand from the financial and other sectors.'
DTZ said the monthly net effective rent in Central and Admiralty had now reached HK$124 per square foot, topping the peak level of HK$122 before the 2008 financial crisis. Supreme grade-A space in Central was now leasing at HK$160 per square foot, just 4.8 per cent short of the pre-crisis peak level.
Wan Chai and Causeway Bay have enjoyed the strongest growth in this quarter, up 11.4 per cent quarter-on-quarter, to HK$49 per square foot per month. Big gains were also recorded in premier grade-A offices in Kowloon East, where the monthly net effective rent rose by 9.4 per cent quarterly to HK$35 per square foot, slightly higher than Tsim Sha Tsui, at HK$34 per square foot per month this quarter.
The price surge was supported by a strong rebound in net take-up of office space to a total of 662,350 square feet, up significantly from 78,273 square feet in the first quarter, the property firm said.
The net take-up in Central of 242,339 sq ft was the third-highest in a quarter there in five years, and was almost equivalent to the entire take-up of Central and Admiralty last year.
'Central made a particularly strong comeback because of some major deals that fell between the first quarter and second quarter this year,' Alva To, the company's head of consulting for greater China, said.
'In addition, there were quite a number of in-house expansion cases in Central/Admiralty this quarter that were small to medium-sized deals, with demand ranging from new initial public offerings of mainland Chinese companies to hedge funds and other companies in the financial sector.'
