Hong Kong office rents forecast to rise 3% this year
A significant amount of supply is also in the pipeline.
According to a Colliers report, Hong Kong will see an office supply boom this year. New supply in 2023, at 3.2 million sq. ft. NFA, is just lower compared to 2022.
As 11 Skies in Chek Lap Kok, scheduled for 2022, was shifted to 2023, the future supply pipeline is heavily concentrated in Kowloon and the New Territories.
Here’s more from Colliers:
In late 2022, the mainland and Hong Kong governments announced several Covid control modifications that allowed quarantine-free travel. We expect this will boost business travel and Hong Kong’s economy.
Consequently, leasing demand, especially for the CBD, is likely to increase, which should strengthen office rents. Still, according to Oxford Economics, interest rates will remain high for at least the first half of 2023.
We expect CBD office rents to see the most benefit from the market recovery and lead the overall recovery of Grade A office rents, which we forecast will increase by 3% YOY in 2023.