Hong Kong Office Vacancies Hit 15-Year High
What’s new: The vacancy rate for Class A office space in Hong Kong’s Central District – the city’s political and business center – hit 6% in August, a level not seen since December 2005, data from real estate services provider Jones Lang LaSalle showed.
Citywide, the Class A vacancy rate stood at 11.6% as of September, also a high not seen since the first quarter of 2005, according to real estate service firm Cushman & Wakefield.
The high vacancy has pressured rents, with Cushman & Wakefield data suggesting rates for Class A space were down 13.9% year-on-year, including a 4.7% drop in the third quarter alone compared with the previous quarter.
What’s the context: Nearly 70% of tenants recently ending leases are multinationals, and the downward trend may last until year-end, said Keith Hemshall of Cushman & Wakefield’s Hong Kong office.
The coronavirus pandemic has led many companies to temporarily let some or even all of their employees work from home as a precautionary measure, leaving offices understaffed or empty. A survey conducted by the real estate service firm showed 65% of tenants said their working from home module will last for a long time.
Hong Kong has also been dogged by controversy and unrest for more than a year due to perceived growing restrictions imposed by Beijing, leading some big multinationals to consider relocating to other parts of Asia.
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