Central District Grade A Commercial Building rent fell 1%
Sino-US trade relations have deteriorated and the local political situation is tense. Tenants are more cautious in renting Class A commercial buildings in Hong Kong. According to the latest research report from Knight Frank, the rent of Grade A commercial buildings in the Central District recorded a 1% decline in May, the second largest decline in the year after a 1.7% decline in March this year.
Causeway Bay has a large decline
According to the report, the rents of commercial buildings in Central and Causeway Bay were the most affected. The rent in May District of Central District was 159.5 yuan per square foot, down 1% month-on-month. The rent in Jiayu Bay in Causeway Bay fell by 3.1% to 81 yuan in May. In terms of the transaction price of Grade A commercial buildings, the average price of Central Plains was RMB 43,907, a slight increase of 0.4% from the previous month.
Although the price of commercial buildings has not recorded a decline, the transaction area can reflect the prudence of investors. Hong Kong Island is generally less than 15,000 square feet. The trading atmosphere in the commercial districts in Kowloon was more active and the number of transactions rose by 65%. Each transaction covers an area of 20,000 square feet or more, and half of the transactions are concentrated in Kowloon East. Rents in Kowloon East fell by 0.1% month-on-month, with an average rent of $32.
In the retail market, the biggest monthly decline was luxury, falling 12.3% in May, followed by department stores, down 11.1%. Durable goods also recorded a 10% decline, reflecting consumers’ low desire to purchase in the face of economic instability. Retail shop rents were also affected. The 6,500 sq ft floor of the lower floor of Jiaxuan Plaza in Central was recently rented for 150,000 yuan.
In addition, merchants are also cautious about expanding their business. Some well-known British brands will set up flagship stores in Pacific Place, Admiralty. Although the product selection is three times more than the average store, the store area is less than half, reflecting that merchants are not optimistic about the prospects.