Market Update Summary - 3rd Quarter 2015

Market Update Summary - 3rd Quarter 2015

Central, Admiralty and Sheung Wan:

Financial sector remains as the main occupiers among office spaces in Central, Admiralty and Sheung Wan. With a low vacancy rate and a shortage of major new supply leasing activity was largely focused to smaller size commercial buildings due to lack of sizable listings in the market. With the fact that large floor size supply will remain low, vacancy rate is expected to remain low from now until 2016. Office rental is expected to sustain its upward trend to 2016.

Highlight leasing activities include, a major Chinese security firm has taken up 3 levels at 33 Des Voeux Central about 4,600 sq ft, a Chinese regional bank has taken about 1,600 sq ft at Two IFC.

Sales activities also show a positive sign, for example, Emperor International Holdings purchased Wincome Centre from Wincome Group for a total consideration of HKD1.3 billion (HKD33,310 per sq ft). Toyo Mall Ltd and Good Stream Ltd purchased V. Heun Building for a total consideration of HKD59.3 million (HKD17,016 per sq ft)

Central Grand A office rents rise by 1.9%, and the vacancy rate fell to 1.2% below the end of September 2015

Causeway Bay and Island East

Chinese funded institutions have been expanding their business. One of the major office renovation project in Wan Chai is 60 Gloucester Road under Emperor Group, which has been leased by a Chinese funded financial institution -China Huarong Asset Management Co., Ltd. The building total gross floor area is approximately 100,000 sf Gross with monthly rental of HK$600,000 (HK$60/sf Gross). Wing Hang Financial Centre (Renamed as 60 Gloucester Road) on Gloucester Road was purchased by Emperor Group in 2013. Refurbishment works was taken to improve the quality of the building after the completion of the transaction. 

Insurance company Manulife has confirmed their relocation from the Lee Garden to their self owned property at Kwun Tong area and Tower 535 at Causeway Bay is ready to lease, Causeway Bay will dominate the supply in Hong Kong Island in 2016.
Another highlighted newly built property in Causeway Bay is V Point on 2 Tang Lung Street, it was purchased by Dr Kwok Siu Ming Simon, the chairman of SaSa group. The building itself has 31 floors which provides approximately 150,000+ sf Gross. The size on each floor is ranging from 4,200sf Gross to 7,500sf Gross. Basement and low zone are reserved for Retail flagship stores, middle zone to high zone are for retail, and F&B usage.    

For the eastern district, Maxim's Group confirmed to relocated its headquarter to the newly built commercial building in Cheung Sha Wan in Q4 of 2015, originally Maxim's Group were occupying 7 floors at 1063 King's Road. 1063 King's Road, a grade A commercial building located at Taikoo, closed to the commercial kingdom of SWIRE Properties, typical floor plate is around 11,000 sf. It is now offering $42 per sf, 15% lower than other supplies in the same district. With the effect of Maxim's Group' relocation, around 70,000 sf would be released, it will certainly ease the tight supply situation in the area.

Grand A office rental rise by 0.7%, and the Vacancy rate remains at 2.8%

Tsim Sha Tsui

At Tsim Sha Tsui, the Remodeling Project of New World Centre has become the focus of new office supply in the future. The 61-storey building, with 3.18 million sq. ft GFA, is the largest composite development project of the district. The project, expected to be completed in 2017, comprises of Grade A office buildings, hotels and shopping mall, and is about to commence the leasing of office space, preferring well-known international financial institutions. Referring to another Grade A commercial building of the district with panoramic sea views, the International Commerce Centre (ICC), the intended asking price of the project is expected to be about HK$70 - 80.

For the past quarter, large leasing transactions of the district recorded are all at the International Commerce Centre (ICC). At 65th floor, for instance, about 26,000 sq.ft, comprising more than half of the floor, is leased by EQUINIX, the world’s largest IT company, engaging networks, data centers and other services. Germany supermarket brand Lidl taken up 90,000 sq ft spaces at ICC as their new head quarter in Hong Kong.

Grand A office rental rise by 1.0%, and the Vacancy rate lower by 0.3%

Kowloon East:

Supply of commercial property remains high in Kowloon East area. For example, Billion Development’s Properties including COS Centre, TG Place and Montery Plaza are ready for lease and sale in the area. Kwun Tong and Kowloon Bay provide a wide range of sizes available for sales and lease at a affordable price, despite the skyrocketing price in recent years comparing to Hong Kong Island. Supply and Rental shall remain stable in the area. Grand A office rental rise to 6.1%, and the Vacancy rate lower by 0.7%

As the concept CBD2 for the area is becoming mature together with sufficient supply in Kwun Tong and Kowloon Bay, it is expected that more large institutions will relocate to Kowloon East next year. Lease transaction in the area includes, Warner Music Group, whose present headquarter was at Hunghom, leased a whole floor unit at high zone of YHC Tower in Kowloon Bay with 11,430 sq ft at the rental of $24 per sq ft. Exhibition Company Mega Expo will relocate from Enterprises Three to a whole floor unit at Skyline Tower for business expansion.

Since the application deadline for building revitalization measure in Kowloon East will be expired in March 2016, numerous single owners of en-bloc are actively sourcing potential buyer who are still pursing to take benefit of building usage conversion. Nevertheless, many small and medium size industrial building have been revitalized and are open for lease and sales.

  • Market Update Summary - Dec 2019S

  • Leasing across all sectors remains subdued The overall leasing market recorded a net withdrawal of 91,900 sq ft, causing the vacancy rate to rise 5.9% across Hong Kong. Vacancy rose in all o ...
  • 14/1/2020
  • Market Update Summary - Aug 2019

  • Retail sales continue to weaken in Hong Kong The Central occupier market contracted by 56,100 sq ft in July amid subdued leasing demand pushing the vacancy rate up to a three-year high of 2. ...
  • 6/9/2019
  • Market Update Summary - May 2019

  • Economic uncertainly results in softer office rental growth The overall market recorded a modest net absorption amounting to 12,200 sq ft, behind a 71% m-o-m growth in new lettings. Leasing ...
  • 20/5/2019
  • 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, h ...
  • 9/10/2018
  • Market Update Summary - May 2018

  • Strata-Titled office transactions surpass the HKD per HKD 60,000 per sq ft mark Net absorption in the overall market amounted to 634,200 sq ft in April, buoyed by the realization of pre-commitmen ...
  • 15/5/2018
  • Market Update Summary - January 2018

  • Housing prices in 2017 increase at their fastest pace in five years The realisation of pre-commitments at Lee Garden Three, issued with its Occupation Permit (OP) during the month, and new ...
  • 26/1/2018
  • Market Update Summary - August 2017

  • Office Leasing activity slowed amid the summer school holidays with a net withdrawal of 17,300 sq ft recorded in the overall market. Wanchai/Causeway Bay and Kowloon East benefitted from ong ...
  • 14/9/2017
  • Market Update Summary - April 2017

  • Padded by tenant decentralisation, net take-up amounted to 52,000 sq ft in March. Wong Chuk Hang continued to attract strong interest with two Government departments reportedly leasing 57,500 sq ft at ...
  • 9/5/2017
 1  2  3    ... 3 Next