Corporate relocation continues To increase demand for Kowloon East commercial building
The latest “Hong Kong Monthly Property Market Report" published by Knight Frank pointed out that the demand for Hong Kong’s Grade A office relocation has continued. In Kowloon, the demand for relocation to Kowloon East has increased.
In Grade A office space, Central Grade A office rents rose by 1.2% month-to-month, reaching a peak rent of 157 yuan. Strong rental demand continued. In March, Grade A office space in Central recorded a vacancy rate as low as 1.1%, down 0.4% month-on-month. Due to the limited availability of office space in Central, some companies are willing to pay higher rents and spend more time looking for office space in Central.
As regards Kowloon, March was the traditional off-season. The Grade A office leasing market in Kowloon continued to be calm. Most of the leasing transactions were relocation cases to reduce expenses. It is expected that the relocation of Kowloon East will continue, as new supply of Kowloon East will be lower this year than in 2016 and 2017. It is expected that the rent in the district will recover in the second half of this year.
Retail sales in February rose by 35%
As regards the retail market, Hong Kong’s retail sales in February reached HK$45.2 billion, mainly due to the relatively low retail sales in February last year, which represented a year-on-year increase of 29.8%. In February, the number of visitors from the Mainland increased by 40.2% year-on-year to 4.4 million. With the closer economic integration between Hong Kong and Mainland cities, it is expected that more leading mainland brands will expand their business to Hong Kong, especially for fashion and lifestyle retailers.
Retailers see Hong Kong as a platform to increase their visibility in the international market. In the long run, the Mainland brand will become an important new element in the retail leasing market in Hong Kong to support retail rents.
In addition, the report also mentioned that the number of residential sales in Hong Kong fell by 27% year-on-year in March.
Hong Kong has not yet followed the pace of US interest rate hikes. It is expected that it will not follow in the future. Given that the market still has a lot of hot money, banks continue to provide attractive mortgage interest rates to increase market share.