Multinationals set to leave Hong Kong’s prime office district Central in search of cheaper rents

More multinational companies will leave Hong Kong’s Central district, where rents have become too expensive, with some even considering leaving the city altogether. 

Average office rents continue to rise in greater Central, which includes the districts of Central, Admiralty and Sheung Wan. In the first quarter, rents jumped by 8.7 per cent from the same period a year ago to HK$134.3 (US$17.1) per square foot a month, according latest figures provided by US commercial real estate services company Cushman and Wakefield. Moreover, rents in core Central, which comprises 12 prime buildings such as the International Financial Centre and Cheung Kong Center, now stand at HK$161 per square foot. 

And while Cushman expects office rents in greater Central to rise by 7 per cent to 9 per cent for the whole year, the largest increase among all districts, global real estate services company Colliers International said it expected rents in Central to increase by another 5 per cent to 8 per cent in the next nine months. 

In fact, Colliers International said some offices in buildings in core Central might even fetch rents as high as HK$200 per square foot a month and set a record in two years’ time. 

“Rents have increased more than we expected,” said Fiona Ngan, head of office services at Colliers International. Data compiled by the company shows that office rents in Central have already risen by between 3 per cent and 5 per cent in the first three months this year.