Cheung Kong's Justin Chiu believes stable supply of lots for business developments may ease pressure on office rents
The government should put more commercial sites on the upcoming land application list to help businesses reduce the volatility of operating costs, according to Cheung Kong (Holdings).
Surging office rents have made Hong Kong one of the most expensive markets to do business and the developer suggests a stable supply of commercial space may ease some of the pressure.
'Operating costs in Hong Kong have been rising sharply in recent years due largely to a tight supply in office space,' executive director Justin Chiu Kwok-hung said in an interview yesterday.
'We're not saying that businesses cannot afford such rents. It's just that volatile rents are unnecessary and not good for the general business operating environment.'
Hong Kong was ranked the third most expensive business location among 117 global cities last year with annual office occupancy costs increasing 61 per cent year on year to US$107.20 per square foot, said DTZ Debenham Tie Leung.
Multinational corporations are bracing for a doubling of rents when leases come up for renewal this year. Rents for units with harbour views at International Finance Centre and AIG towers have fetched $90 to $95 per square foot. Agents had expected office rents would not peak until the middle of next year.
