Central commercial building rents top, it is difficult to call back next year
Rents in Central Commercial Building have repeatedly broken, and Liu Baiwen, senior director of the Commercial Department of Knight Frank Hong Kong, believes that due to the extremely low vacancy rate in the Central District and the continued demand, rents are unlikely to be adjusted next year. In addition, she said that the concept of shared workspace is only in the initial stage of Hong Kong, and the pace of expansion is fast, but there is no saturation.
According to the Knight Frank report, the best quality commercial buildings in Central were rented at about $198 in July, up 1% month-on-month, up 7.8% a year, while the overall commercial rent in Central was 161.2 yuan. Both figures are historical highs. Liu Baiwen pointed out that in the first half of the year, Jiaxia has accumulated a certain increase, and the annual increase is about 10%. She thinks that the rent is upward, and the supply is too small. “There are very few units to be rented, and each unit is launched. The competition of 8 or more tenants will naturally make rents difficult. I believe there will be no decline next year.”
Chinese rent-raising situation has slowed slightly this year
In the past two years, the situation of Chinese commercial units in the Central District has been slightly slowed down this year. “Chinese demand has been strong for two years. It seems to be relatively rational and the pace is slightly slower. Their preferred choice is still in Central, if there is no Central The Wanchai North, Admiralty, or Central sub-commercial buildings are also acceptable.” She said that because the flats are rare, the owners are dominant. Therefore, when selecting tenants, they are not necessarily based on the negative renting ability. Important, not necessarily the highest price.”
As for the factors affecting the business environment, there is still a Sino-US trade war. She pointed out that there is no impact on the rental market for the time being. “If the intensity is greater and lasts for a long time, the opening of mainland companies to Hong Kong may be affected, and I I believe that trading institutions are the most affected. Most of these companies have opened in Kowloon. There is no problem with the commercial buildings on Hong Kong Island.”
Central has always had very little supply. She pointed out that there have been changes in the two properties in the district this year, which has further reduced the original supply. Among them, Cheung Kong (01113) announced the redevelopment of its Hutchison Building in Central. The redevelopment of Hutchison Building has a floor area of over 490,000 square feet and a height of 41 floors. It was completed in 2023. “The original tenant has to move out. There are one more tenants in the market who have to pay for the floor. In the year, she mentioned that the 75% ownership of the Central Centre has changed hands. Many new buyers have re-leased their rents and even sold their flats in the form of smuggling. Therefore, tenants have to relocate. The situation of insufficient supply within the country was further strained.
Emerging business districts
Rents have hit new highs and formed a new phenomenon. It is a traditional professional industry and needs to move out of Central. “Lawyers, accountants and consultants have all begun to consider moving out of Central. Individuals have also moved. Previously, such companies only moved logistics. Now, the headquarters is also moving to the non-core area, all due to affordability. At the same time, the quality of the new business districts is good, attracting large institutions to enter. “The commercial facilities of the East Taikoo Square in Hong Kong Island are beginning to mature and the quality of the properties is high, such as One of the Taikoo Place is a full sea view, and the working environment is first-class. Compared with the commercial buildings in Central, it has nothing to do with it. Therefore, the idea of a large organization has changed and it has no problem to move to a non-core area.”
Another noteworthy new business district is Wong Chuk Hang. She said that the financial industry and the CPA Building have also moved to the area. “As far as I know, individual private equity funds have moved to Wong Chuk Hang because the company owner is living in the Southern District. Insufficient supporting facilities in Wong Chuk Hang, owners of individual buildings provide pick-up vehicles to enable staff to reach the Aberdeen area to eat, which can solve the inadequate food package in Wong Chuk Hang.” The biggest problem in the district is that there are fewer commercial buildings in the building. The biggest disadvantage of the pit is that there are fewer commercial buildings in the building. The floor space of each floor is more than 10,000 square feet. There are more commercial buildings in the East Kowloon Building.”
In the past two years, the most active in the rental market is the sharing of workspace merchants, including wework, naked hub, Spaces and other foreign brands, plus the mainland brands such as the space to rent a new office. Liu Bowen pointed out that he has been in contact with shared space merchants for a long time and believes that this concept has room for development in Hong Kong. “The first one can attract start-ups because the shared space office provides basic renovation and reduces the cost of starting a startup. Second, sharing The concept promoted by space is to build a community and network so that different people can get to know each other and seek business opportunities.”
Shared workspace
She emphasized that a large target group of shared space is that large organizations have moved some departments. “For example, the organization has set up a new department or team involving 100 people. They can rent a shared space office and terminate the contract when the project is completed. Convenient.” She analyzed that the shared space has not yet saturated in Hong Kong. “The trend has just begun. Many companies have begun to accept this model. Hong Kong’s own commercial buildings are expensive, and the cost is heavy and flexible. Therefore, the emerging model of cooperation with the shared space is still with potential.”