Office market looks bleak as firms cut back
Updated: 2009-07-15 07:08
By Melody Cheung(HK Edition)
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IFC Two towers over other office buildings on the Central business district waterfront on Hong Kong Island. The city's Grade-A office rental market has been hit hard by the global financial crisis and is not expected to recover soon. AFP |
HONG KONG: The outlook for the city's Grade-A office market remains clouded in the second half as corporate occupants continue to relocate to save rental cost, according to property consulting firm DTZ.
The firm expects office rental rates to continue to drop in the second half after a slump in the second quarter, albeit at a slower pace as the operating environment for enterprises has improved slightly.
Alva To, the firm's head of consulting for North Asia, said in a press briefing that he expects a further 5-10 percent drop in office rentals in the Central/Admiralty area over the second half after a 32.8 percent drop in the second quarter from a year ago.
Meanwhile, office rentals in Island East will likely fall another 5 percent following a 22.6 percent drop in the second quarter. Rents at Kowloon East will likely stay steady through the second half after a 26.9 percent fall in the second quarter, he said.
During the second quarter, the overall Grade-A office take-up on Hong Kong Island plummeted for the third consecutive quarter after peaking in the second quarter last year.
On Hong Kong Island, a total of 621,920 square feet of office space was offloaded in the second quarter, with the Wanchai/ Causeway Bay area seeing the most office space returned at 353,134 square feet.
Although there were improvements in some districts, To forecasts that the overall office take-up will remain negative through to the end of the year.
(HK Edition 07/15/2009 page4)