Market Update Summary - January 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 lettings in new builds in Kowloon contributed to net take-up in the
overall market amounting to 449,500 sq ft in December. Leasing activity in Kowloon East
continued to be dominated by upgrading demand. Technology company LazyBug Studio
reportedly leased a floor at Two Harbour Square (20,800 sq ft) in Kwun Tong, relocating out of
industrial offices in Hunghom.

• In Central, new lettings fell by 32% m-o-m, largely owing to the traditional holiday season. PRC
firms continued to dominate leasing activity, representing 67% of all new lettings. The pending
sale of The Center did not dissuade two PRC firms reportedly leasing 30,000 sq ft in the building.
• Central rents advanced by 0.4% m-o-m as vacancy tightened to 1.7% while rents in Hong Kong
East advanced by a market leading 0.8% m-o-m on the back of a tight vacancy environment;
excluding vacancy in the recently completed 18 King Wah Road.

• Investor interest in Grade A offices remained strong in December. A small office unit at
Convention Plaza in Wanchai reportedly exchanged hands for HKD 75.0 million or HKD 35,954
per sq ft, setting a new record high in the building, in terms of unit price.