Hong Kong’s finance sector may need another 5 million sq ft of office space over next decade, JLL says
Financial services industry will add as many as 55,000 jobs in Hong Kong
Hong Kong’s financial services sector will require up to 5 million more square feet of office floor space over the next 10 years, driven by the growth of mainland Chinese banks, a new report says.
The office space demand stems from the 55,000 jobs in financial services that may be added over the next decade, particularly in fund management related services, according to report from international real estate agency Jones Lang LaSalle (JLL) on Monday.
Hong Kong has the most expensive office space in the world, but demand in the Grade A office market has been buoyed by financial institutions that can “pay above market rents across all locations”, the report said.
As one of Asia’s largest financial hubs, Hong Kong’s finance sector has grown at a compound annual growth rate of 2.1 per cent since 2000, compared to 1.4 per cent for all industries.
But headwinds such as low interest rate policies have forced Western banks to trim regional operations, with Goldman Sachs cutting nearly 30 per cent of its Asian investment banking jobs outside Japan, as mainland Chinese banks continue to grow.
“Even as larger Western banks trim their operations in Hong Kong, the overall impact on the market will be dampened by the growth of mainland financial firms in the city,” said Denis Ma, head of research at JLL.