Rentals in key areas show signs of levelling

RENTS in the core business districts of Central, Admiralty, Wan Chai and Causeway Bay appear to be stabilising, rising on average by just one per cent in July.

Research conducted by City Property Consultants (CPC) showed that prices in Central and Admiralty, where office rents had risen most sharply over the past six months, slowed markedly in July, increasing by only 1.2 per cent to an average of $87.71 per square foot net.

The vacancy rate has risen to 2.4 per cent.

According to CPC director Hugo Poon, the increase in the vacancy rate is the result of some companies refusing to pay increased rents, and moving out to cheaper areas instead.

The average rental in Wan Chai and Causeway Bay increased slightly, by an average 0.7 per cent to $61.92 per sq ft, according to CPC's statistics. Rents in the area have increased by 33 per cent since January 1994.

''People in these areas are trying to move out of the district or find something cheaper in the area,'' said Mr Poon. According to CPC's statistics, the average vacancy rate for the territory as a whole has now increased slightly to 2.7 per cent, the statistics showed.

This is marginally higher than reported vacancy rates of 2.1 per cent in May and 2.4 per cent at the end of June.

A further breakdown of the statistics reveal that the vacancy rate in Central and Admiralty hit 2.4 per cent.

The vacancy rate for Wan Chai and Causeway Bay has hit three per cent, according to Mr Poon.

All-told Mr Poon's study covers rents charged in 76 buildings in the primary and secondary markets in the core business districts of Hong Kong.

Mr Poon's firm also measure the net letable area of those 76 buildings and he estimates that the amount of vacant space is approaching 300,000 square feet in Central.

He said there was a further 280,000 square feet of office space vacant in Wan Chai and Causeway Bay.

Mr Poon estimated that his survey of 76 buildings cover a gross floor area of 600,000 square feet.