Chinese firms drive Hong Kong leasing demand

At least 20 per cent of all space leased in Central last month taken up by companies from China

PUBLISHED : Wednesday, 27 May, 2015, 1:28am
UPDATED : Wednesday, 27 May, 2015, 1:28am

Mainland firms continued to be an important source of demand for office space, having taken at least 20 per cent of all space leased in Central last month, according to consultant JLL.

The vacancy rate in Central declined to 2.5 per cent last month, the lowest monthly level since the global financial crisis began in November 2008, primarily driven by robust leasing demand, according to this month's edition of JLL's "Hong Kong Property Market Monitor".

Net take-up in Central amounted to 167,700 square feet.

"Increasing demand from the banking and finance sectors contributed to the decline in the vacancy rate in Central to its lowest level in more than six years," said Ben Dickinson, the head of markets for Hong Kong at JLL.

"With availability in Central tightening and rents rising, more companies will start to consider relocating to other business districts such as Causeway Bay and Quarry Bay."

Another district that saw increased demand was Tsim Sha Tsui in Kowloon.

Led by demand from regional banks, the vacancy rate in the district edged down to 0.6 per cent last month, its lowest level in more than a decade, from 0.9 per cent in March.

Bank of Communications leased 13,700 sqft of gross floor area while Industrial Bank of Taiwan took 12,100 sqft of gross floor area at The Gateway Tower 6.

In the property investment market, there were fewer en-bloc transactions recorded last month. Investment volumes slumped 82 per cent month on month to HK$446.7 million, the lowest level in two years.

Yu Kam-hung, a senior managing director of investment properties at CBRE, said buying interest would improve as investors anticipated more demand from mainland securities firms triggered by the Shanghai-Hong Kong Stock Connect scheme and the soon-to-be-launched Shenzhen-Hong Kong stocks through train programme.