Hong Kong companies need to consider moving to Qianhai

Hong Kong needs space to allow its economy to grow and it is becoming increasingly clear that key decision makers believe that the solution may not lie exclusively within Hong Kong's physical boundaries.

The simple fact is that the lack of available office space in Hong Kong is a major concern for occupiers and, if this is not addressed, then, over time, we could see some occupiers re-assess their commitments here.

The vacancy rate is close to a historic low despite the less than robust economic environment. Yet supply forecasts suggest a shortfall in new completions going forward. Moreover, a lot of space scheduled for completion through to the end of the decade will be unsuitable for major occupiers, either because the building floor plate is too small or the anticipated fragmented ownership is less than ideal.

The lack of options for occupiers contributes not only to high occupancy costs but also market volatility, which combine to hinder long-term planning for companies in Hong Kong.

Less than one hour from Central, across the border in Qianhai, development land has been sold, or is soon to be tendered, which will allow for the completion of approximately 14 million square feet of office space by 2018. Given the constraints that occupiers face and will continue to face in Hong Kong, new developments such as Qianhai are bound to attract attention.

However, which business sectors are most likely to produce candidates to occupy space there?

CBRE's global corporate services team is well positioned to gauge potential occupier interest and believes that the finance sector would be keen to explore two main options - front-office trading (subject to regulatory approval by the Hong Kong Stock Exchange) and potential back-office functions that would support the Pearl River Delta area.