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Hong Kong's office rents fell 15 per cent in the six months but remain the third most expensive in Asia, according to an international property consultant's survey.

 The SAR, ranked second-most expensive in the previous survey, had been overtaken by Bombay, Cushman & Wakefield said.

 The survey, based on net effective office rents, showed that the present occupancy cost for Hong Kong prime office dropped to US$63.64 per square foot a year, 8 per cent lower than Bombay's.

 Tokyo, with net effective occupancy cost at $95.63, remains the most expensive market in Asia.

 Fourth-ranked is New Delhi followed by Seoul and Singapore.

 Richard Middleton, director of research for Cushman & Wakefield Asia, said net effective rents for prime offices in Central had bottomed out, but rents would stay at the present level in the next six to nine months.

 He believe that, as supply would be limited from next year to 2002, the effective rents in Central could pick up 30 per cent by the end of next year as landlords cut rent-free concessions. Upgrades of grade B and C offices would contribute to grade A office demand.

 With Bombay overtaking Hong Kong on the list, Mr Middleton said, the Indian market was characterised by a limited supply and some of the best buildings could charge premium rents.

 He said the effective rents for Hong Kong were 30 per cent more expensive than Singapore's.

 However, after taking into account the management charges, air-conditioning charges and rates, Hong Kong's occupancy costs were 80 per cent higher than Singapore's.

 He believed the gap would become narrower, as Singapore's economy had started to move up quickly and its rents were expected to move up in the second half of next year.

 Cushman & Wakefield's figures showed that Hong Kong's effective rents stood at $46.34 but its effective occupancy cost reached $63.64 after including other charges and rates. The service charge alone amounted to $12.16.

 Mr Middleton said Beijing's vacancy rate was 45 per cent and Shanghai's 37 per cent.

 The occupancy cost for Beijing, being the ninth-most expensive city in Asia, stood at $26.83, while Shanghai, the eleventh-most expensive, cost an office user $19.29 per year to take one square foot.

PROPERTY 



SAR rents stay in Asia's top tier