Analysts still bearish about Hong Kong Island’s office market
Vacancy rates in Central is expected to hit record highs this year.
As many of the headwinds impacting Hong Kong’s property market in 2023 will continue into 2024, analysts at Knight Frank remain bearish about the outlook for Hong Kong Island’s office market. New demand will be limited amid weak market sentiment.
According to Wendy Lau, Executive Director and Head of Hong Kong Office Strategy & Solutions at Knight Frank, the high vacancy rate continues to affect the office leasing market on Hong Kong Island, and rents keep falling. Given the significant amount of new supply in 2024, particularly in the CBD with approximately 1.2 million sq ft of new floorspace, we expect the vacancy in Central to further elevate to an unprecedented high level.
“The flight-to-quality trend will continue, as occupiers capitalise on falling rents for office or location upgrades. However, given the global and local economic conditions, as well as the absence of positive news from the Chinese mainland, office leasing demand is expected to remain subdued in 2024 in the absence of stimulus. We expect office demand to remain soft in 2024, and the overall rent on Hong Kong Island will fall by up to 3% for the whole year,” Lau added.