Chinese finance firms target Central offices
Leasing activity in HK's business core is on a healthy track as mainland companies take up grade A spaces before through train starts
The upcoming stock through train scheme has breathed life into the office leasing market of Central as mainland financial firms set to expand their presence in Hong Kong.
Property consultants said mainland firms are now the driving force for the Central office market, accounting for about 20 per cent of new leases in the first half, up from 15 per cent in the same period last year.
"The size of mainland tenants will continue to grow gradually. Many landlords of Central office buildings now hope to attract mainland companies as their tenants," said Paul Yien, regional director of Hong Kong markets at property consultancy JLL.
In the latest example, Champion Real Estate Investment Trust, which is facing an increase in vacancy in its Citibank Plaza in Central, offers a "flexible" rental strategy.
Analysts said Champion Reit has decided to adjust its leasing strategy by reducing its asking rent from the previous HK$80-85 per square foot per month to HK$72 per square foot in order to attract more tenants.
According to BNP Paribas, the vacancy rate of Citibank Plaza was 11.4 per cent as of the end of the first half, but this would increase to about 24.9 per cent after the expiry of leases held by Bank of America Merrill Lynch and Nissan in the second half.