Market Update Summary - Sep 2018

South Island Place received its Occupation Permit in August, delivering 307,200 sq ft of Grade A office space to the Wong Chuk Hang office market. The realisation of pre-commitments in the building, however, was offset by returning space in Kowloon East, resulting in net take-up amounting to just 28,300 sq ft in the overall market for the month. Returning space in Kowloon East is likely to continue to weigh on overall net take-up over the short-term due with about
452,000 sq ft (equivalent to 2.7% of the submarket’s stock) to be vacated upon lease expiry over the next 12 months.

Despite new lettings in Central dropping by 51% m-o-m, a number of finance related firms sought to expand in the submarket. Most notably, BitMEX, a cryptocurrency trading platform, reportedly leased the whole of the 45th floor (19,200 sq ft) at Cheung Kong Center, paying a monthly rent of HKD 225 per sq ft, a record high in the building. BitMEX will be relocating out of a non-Grade A office in the New Territories. Fullshare Holdings expanded in-house to 9,700 sq ft at Admiralty Centre Tower 1.

Grade A office rents advanced by 0.7% m-o-m in August with Wanchai/Causeway Bay posting the strongest growth, up 1.0% m-o-m, on the back of robust demand. In Central, rents grew by 0.9% m-o-m while rents in Grade A1 offices grew by 1.6% m-o-m amid tight vacancy.

Pricing in the strata-titled sales market remained hot with Mexan Limited announcing the purchase of a small unit in the high zone of Far East Finance Centre in Admiralty for HKD 165.0 million, or HKD 59,353 per sq ft, the second
highest unit price in the building.