Rents lowered amid new supply

With an abundant supply of new office space coming on the market in the next few years, rents outside Central have shown signs of softening with some landlords cutting rates by 5 to 15 per cent, according to property consultants.

New office supply, totalling 10.5 million square feet, will arrive from now until 2010, according to Colliers International.

Most of the supply is in East Kowloon and the 118-storey International Commerce Centre opening next year at Kowloon Station.

'Evidence of rents having peaked is most apparent in the Causeway Bay district. In reply to the significant decline in new enquiries [for space] in Causeway Bay, landlords have surprised the market, and begun offering discounts to rents by 5 per cent to 15 per cent,' said Jason Cruz, an associate director of Colliers International (Hong Kong)'s commercial leasing department.

Last month, rents for commercial premises either remained flat or fell, on Hong Kong island and Kowloon, he said.

However, property consultants said the trend for office rents in Central is going in the other direction with rents still rising.