Owner-occupiers are expected to remain a key demand driver for office properties in Hong Kong as they look for options to hedge against escalating rents, according to property consultants. "Low vacancy triggers occupiers to consider buying, partly also as a hedge against escalating rents," international property consultant CBRE said in a newly released report. CBRE forecasts that overall market rents will increase by high single-digits to 10 per cent this year. Central landlords will enjoy the strongest rental growth of 10 to 15 per cent, while some submarkets are expected to benefit from the spillover effect from the business district. "Yet limited stock of saleable assets in the Central Business District is prompting buyers to consider assets in decentralised districts like Kowloon East," the report said. Both primary and secondary markets in Kowloon East will serve as the major source of office supply in the city in the medium term, providing a wide range of property options to tenants and owner-occupiers, said another consultant, Colliers International. Colliers, on behalf of its client, is selling the entire 12th floor of Enterprise Square III, Kowloon Bay, by public tender. The tender will close on August 21. The building is a landmark grade A office site in Kowloon Bay. During the three months to May, the total value of transactions for properties priced above HK$30 million increased 6 per cent quarter on quarter to HK$4.9 billion, Colliers said in a soon-to-be released research report. A notable transaction was the sale of a whole floor at 9 Queen's Road Central to a mainland Chinese investor for HK$480 million, or an average price of HK$34,861 per square foot - a new record high for grade A office property in Hong Kong, it said. However, CBRE expects the number of larger transactions to remain thin in the second half of this year. "We expect, in Hong Kong, the number of transactions will remain thin in the second half of 2015 due to the lack of saleable assets available in the market," said Yu Kam-hung, a senior managing director of investment properties at CBRE Hong Kong. Commenting on the impact of a possible interest rate increase, Yu said: "Any interest rate rise by the [US] Federal Reserve in the near future will likely be moderate and progressive, and the immediate impact on property yields will be mild. Prices are not expected to deviate too significantly from rental trends." Total sales turnover of commercial real estate amounted to HK$27.1 billion, an increase of 153 per cent quarter on quarter, according to CBRE. However, the increase was mainly due to one hotel transaction - Abu Dhabi Investment Authority's HK$1.85 billion payment to New World Development for a 50 per cent stake in three hotels in Hong Kong. Excluding the transaction, total investment volume declined to 6.1 per cent quarter on quarter to HK$10.9 billion, the lowest quarterly total recorded since the first quarter last year, according to CBRE.