13/8/2018-8

Commercial building rental continued to be prosperous.

The rental of Jiaxia is still prosperous. According to Gao Li, the absorption of office buildings in the second quarter rose by 43.4% quarter-to-quarter.

Colliers International’s second-quarter property market research report said that the office leasing market continued to be strong in the second quarter of 2018, and the overall net absorption increased by 43.4% quarter-to-quarter to 928,160 square feet.

The expansion of the financial institutions in the Mainland has driven the leasing demand in the core business districts. In other parts of Hong Kong, the existing operators of relocation and shared workspaces have actively expanded, driving demand in many non-core areas. Although Kowloon East expects a new supply of 1.3 million square feet in 2018, strong absorption still reduces the vacancy rate.

Jiasha rent increased by 3.8% quarter-to-quarter

Overall, Grade A office rents increased by 3.8% quarter-to-quarter; while vacancy rates fell to 4.5% in the second quarter, down from 5.1% in the first quarter.

Looking ahead to the market, Colliers expects overall rents to rise by 7.9% in 2018 and a total increase of 9.6% between the end of 2018 and 2022. For companies seeking to save on rental costs, some emerging non-core business districts such as Wong Chuk Hang are worth considering.

In the industrial market, the second quarter saw strong growth, mainly driven by forced relocation and expansion, with rents rising by 2.3% quarter-to-quarter.

The bank said that the rents of warehouses and tiered factory buildings are expected to increase by 8% each in 2018 and by 5% between 2019 and 2022, driven by limited demand and vacancy rates. The investment climate is optimistic, and the prices of warehouses and tiered factory buildings are expected to rise by 10% to 15% in 2018 and then by 8% per year between 2019 and 2022. However, the bank expects that the pace of growth will slow down in the second half of the year, mainly due to the softening of business confidence and the Sino-US trade war.