CBRE

Causeway Bay vacancy hit single-digits for the first time since Q1 2020.

The completion of a new logistics centre in Tuen Mun contributed to this.

A total of 20 transactions were accounted for during the period.

Q3 saw an additional 1.8 million sq. ft. of new office space.

The property is adjacent to Tong Fuk Beach.

Demand will be coming from multinationals and Chinese enterprises.

This has resulted in a 3.1% drop in total space office space occupied.

The 12-storey facility features direct sea access along Aberdeen Harbour.

The 10-storey industrial building is on sale until 15 September.

It’s partly because of the new administration.   Landlords are becoming more optimistic about the retail market, and it's partly thanks to the new administration, said CBRE.   In a report, CBRE said the measures of the new administration to revitalise the economy has given landlords a confidence boost.   Also contributing to the landlords’ improved optimism is their belief that high-street rents have already bottomed out.   “They are expecting rents to be stabilised or to be improved from the current levels,” said CBRE, adding that landlords also feel that in the future, the impact of the pandemic on the retail market will be “limited.”   Brands and retail operators, for their part, are also “actively deploying their business strategies with most having new stores opening in the plan for the coming year,” said CBRE.   Segments which are most active in terms of expansion are healthcare, supermarkets, high-end household goods and daily necessities.   On the flip side, CBRE said landlords and tenants are still in a stage of the seesaw battle when it comes to compromising on the rental terms.   Given the situation, the expert said retail vacancy level in H2 will likely remain stable, whilst rents will only increase by a meagre 0% to 5%.

This translates to a 17.5% increase from last quarter.

Vacancy edged down to 1.4% in Q2 2022.

Limited inspection activity caused the decline in leasing demand.

Amongst core districts, Tsim Sha Tsui had the biggest vacancy rate.   High-street shop vacancy rose 1.3 percentage points from Q122 to hit 16.5% in Q2 22, data from CBRE showed.   The increase in vacancy was likely due to some landlords, who are under limited financial pressure, opting to leave units vacant rather than renting them out.   This practice was most evident in Tsim Sha Tsui and Mong Kok where vacancy rates were the highest, at 23.2% and 18.9%, respectively.   Whilst vacancy rose during the quarter, rents remained flat. According to CBRE, rents were unchanged from Q122 because “cash-rich landlords with strong holding power prevented some units from transacting at lower rents this quarter.”   In addition to rents being unchanged, leasing volume also increased in Q2, signalling an improvement in the retail property sector.   “Improved retailer sentiment underpinned an increase in transaction volume, although many deals signed this quarter involved short-term leases,” CBRE commented.

The original closing date was 7 July.   The tender for The Remaining Portion of Inland Lot No. 8590 and The Remaining Portion of Inland Lot No. 8723 at Hoi Yu Street, Quarry Bay, was moved to noon of 25 July upon request of potential buyers.   Originally, the tender was to close on 7 July.   “We receive requests from most of the potential buyers demanding extra time to study the property thoroughly and make informed internal discussion,” CBRE, the property’s marketing agent, said.   CBRE said the property received interest from developers from Hong Kong and China, real estate investment trusts (REITs), institutional funds, family offices, and private investors.   The site for sale is expected to be developed into a large-scale mixed-use complex for commercial, leisure and tourism use.

The property sale will be via public tender until 29 July at 12 noon.