Despite Hong Kong experiencing mounting economic uncertainty over the past three years, low vacancy has prevented Grade A office rents from softening. Landlords have continued to enjoy near full occupancy across their portfolios, prompting several multi-floor occupiers to relocate to decentralised submarkets where the majority of new and cost-effective supply is available. With the city remaining one of the world’s most expensive office markets, cost continues to drive corporate real estate decisions.
The recent rapid emergence of start-up companies has given rise to coworking centres, which have also become an alternative office space solution for many large corporates across different industries. Tech remains a dynamic sector and has continued to drive demand for traditional office space, business parks and coworking centres. Some CBD landlords continue to regard Chinese enterprises a key target occupier group when seeking replacement tenants for spaces vacated by traditional large multinational occupiers.