Mainland Demand Drove Hong Kong Office Rents Still Higher in November

Grade A office rents in Hong Kong’s Central district continued to rise in November, edging upwards by 0.3 percent compared to the previous month, despite a slight increase in vacancy in the city’s prime business district, according to a recently released report by JLL.

Demand from mainland financial institutions continued to drive rising rents in the district with JLL reporting that China’s Ping An Bank leased 13,900 square feet at One Exchange Square for close to HK$140 per square foot per month. Lichtenstein-based financial firm LGT, also took more space in Central, expanding by some 27,800 square feet at Two Exchange Square.

Mainland Banks Need Bigger Homes in Central

“Chinese financial service companies drive the vast majority of demand in Central,” JLL’s head of markets for Hong Kong, Alex Barnes, noted in a statement. “Demand from Chinese corporates will be the engine room of the Central office market into 2018.”

In addition to Ping An Bank’s move into Exchange Square, in October, Fujian-based lender Industrial Bank ( 兴业银行) is said to have leased three floors of office space at One IFC, taking up 60,000 square feet in the prime commercial complex.

Total take-up of grade A space city-wide amounted to 68,000 square feet during the month, according to the agency’s research, although vacancy rates edged up by 0.1 percentage point to 1.9 percent.

Hong Kong Leads the World Again

The new figures on office rents in Central come just one month after JLL’s competitors at Cushman & Wakefield crowned the district as the most expensive place to rent an office in the world.

According to a survey comparing the cost of accommodating staff globally the property consultancy found that the cost of office space had risen 5.5 percent year on year in Hong Kong, reaching US$27,432 per workstation per year. The rise in office costs put the Asian financial hub ahead of London’s West End, which finished second, and Tokyo, which had the third most-expensive office space.