Hong Kong office rentals down 4.7% in Q3

Overall office rentals dropped for the sixth consecutive quarter.

Office rentals declined further in Q3 2020 as average rent in Hong Kong dropped by 4.7% QoQ and 13.9% YTD.

The drop was predominantly caused by rental declines in Greater Central and Wanchai/Causeway Bay, which logged 6.3% QoQ, 16.9% YTD, and 5.2% QoQ and 15.0% YTD figures, respectively.

Greater Central and Wanchai/Causeway Bay office rentals are expected to plummet to 25% and 23%, respectively, for 2020 as the leasing market is predicted to remain weak through the rest of the year.

Overall office space availability rate scaled to 11.6% as surrendered space reached 626,000 sq ft. Kowloon West and Kowloon East recorded the highest space availability rates at 16.6% and 14.9%, respectively.

“Of the total, 70% space was surrendered by multinational corporations,” said Keith Hemshall, Cushman & Wakefield’s executive director and head of office services for Hong Kong. “This upward trend is expected to continue for the remainder of 2020.”

Retail rentals dived in Q3 2020 as well, with Causeway Bay (7.9% QoQ, 41.3% YTD) and Central (7.8% QoQ, 40.8% YTD) recording the sharpest slips.