Demand at the premium end continues to grow but rentals for lower grade office space are expected to remain sluggish
The grade A office leasing market has continued its bull run this year, banking on robust demand from financial institutions.
However, the market boom has thrown up a mixed bag for grade B offices, which are still lagging behind.
Property consultants expect the outlook for grade B offices to remain sluggish over the next two quarters, with flat rental and price growth caused by a tougher operating environment for small and medium-sized enterprises, property consultants predicted.
'The continuing rally in the office leasing market has not benefited grade B premises at all because it is dominated by the financial services industry,' said Daniel Wong Hon-shing, Midland Realty commercial sales director.
'Grade B office tenants, which are mainly trading and manufacturing companies, are still having a tough time as rising raw material costs are cutting their profit margins razor thin.
