Outside of Hong Kong's Central District, more companies are looking for office space.

 

After two months of negative growth, net take-up on Hong Kong's Grade A office market rebounded by 51,800 sq. ft. in April 2016, according to JLL's latest Monthly Market Monitor released this week. The majority of leasing activity was observed outside of Hong Kong's Central district. sale qatar

Quarry Bay welcomes its first international law practice.

Many businesses sought office space in neighboring business areas as rents continued to rise and the vacancy rate of Grade A offices in Central was just 1.4 percent at the end of April. Berwin Leighton Paisner (BLP), an international law firm, signed a six-year contract with Swire Properties to move its Hong Kong office out of the Central district and onto 15,000 square feet in Dorset House. An international law company has opened an office in Quarry Bay for the first time.

JLL was tasked by BLP with advising on the search for the location of a new office. Modern client amenities, including a flexible seminar and conference area, will be included in BLP's new premises, allowing for large-scale professional events. The law company feels that working in a modern, collaborative setting will allow them to better serve their clients.

Industry agglomeration benefits Causeway Bay and Kowloon East.

The newly developed Tower 535 in Causeway Bay benefited from the growing demand for new set-ups, with WeWork, a US-based coworking space operator, leasing eight floors of the skyscraper for their new operations center. Kowloon East is quickly becoming the city's new office hub for the shipping and logistics sector, and this is WeWork's first venture into the local market as part of their aggressive expansion plans in the region. Kuehne + Nagel, a Swiss logistics company, is the latest to relocate to the area, having taken 46,500 square feet at Manhattan Place in Kowloon Bay.

Despite a tight vacancy situation, rents in all submarkets on Hong Kong Island continued to move higher, albeit little. In April, average grade A office rentals in Central increased 0.5 percent month over month to HKD105.6 per sq ft.

JLL's Head of HK Markets, Alex Barnes, remarked, "Costs and workplace strategy are becoming increasingly important to law firms. The lack of vacancy and expensive rents in Central would only drive more people to relocate to surrounding neighborhoods like Quarry Bay, where they have a large client base."

"Companies are increasingly looking for commercial districts where they can support expansion, new workplace changes, and cheaper occupancy expenses. This can be observed in the high demand for offices in Quarry Bay and the smaller Wong Chuk Hang market "Added he.

Denis Ma, Head of Research at JLL in Hong Kong, also had something to say about it "Despite the fact that headline vacancy rates in all districts remain low, tenants will progressively see opportunities emerge in the market in the coming months. Approximately 860,000 sq ft (0.9 percent of total stock) of floor space will be vacated in the next three months, with Kowloon East providing the largest opportunity. This large amount of marketable space is one of the reasons why rental growth has been so slow, despite historically low vacancy rates."

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