Chinese funds to lift Hong Kong’s Grade-A office prices, CBRE says
As two commercial sites will close tender on March 31, Hong Kong is likely to see record transaction prices on office assets, according to CBRE.
The Hong Kong Lands Department will put two commercial sites up for tender on March 31, including one plot in Murray Road, with fierce bidding expected between mainland and local developers keen on securing the prime site in Central.
“I often say it is only the start of mainland developers’ aggressively snapping up land in Hong Kong,” Wong said. “After they fully understand the building strategy and gain more experience here, more medium sized mainland firms will be passionate about buying up land in the city.”
But one concern is whether mainland developers can maintain a good quality level for their Hong Kong developments, Wong said, as they have only just started buying the land.
In the leasing market, financial institutions are still major occupiers of the city’s grade A office space, accounting for 28 per cent of new leasing activity last year, with Chinese firms continuing to be the dominant force, according to Wong.
CBRE said in its report earlier that growth continued to be led by Central, which saw rents climb by 8.7 per cent over the same course of the year.
Rents in Kowloon East fell by 3.3 per cent over the period due to mounting vacancy pressure. The lack of a solid economic recovery will ensure leasing momentum in the Grade A offices market remains weak in 2017.
(In an earlier version, two quotes attributed to Stanley Wong, executive director of capital markets for CBRE Hong Kong, were taken from CBRE’s January report. Mr Wong did not make those statements.)