China's march into Hong Kong real estate: mass buyout of buildings snatches up CBD office space
Two most expensive office tower transactions in the city recorded last week
Hong Kong’s Grade-A office towers are starting to be occupied by mainland Chinese enterprises as they buy en bloc buildings and lease office space in the central business district amid rapid business expansion.
Chinese companies will be the key driver of new take up and office acquisition in the next three to five years
Their explosive demand for office space spurred rents for Grade-A offices to rise for a tenth consecutive month in October, with the vacancy rate in Central dropping to about 1 per cent, according to property consultants.
Mainland firms stole the spotlight again on Friday when two of them acquired two office blocks from Hong Kong-based property companies in the two most expensive office tower transactions in the city.
Mainland developer Evergrande Real Estate agreed to buy the 26-storey Mass Mutual Tower in Wan Chai from Chinese Estates Holdings for a record-breaking HK$12.5 billion. On the same day, China Life, the mainland’s largest insurer, announced the purchase of an en bloc office tower with a two-storey retail block at One HarbourGate in Hung Hom for HK$5.85 billion from Wheelock & Co.
The trend will continue.
A study by another property consultant, Colliers International, said mainland Chinese banks’ demand for office space in Hong Kong would increase by 450,000 sq ft in next five years.