Primary sales dominate Hong Kong’s office investment market

One transaction amounted to around HKD1.19b.

In a recent report, JLL said the office investment market in Hong Kong was dominated by primary sales activities. 

For instance, New World Development sold three high-level floors at 888 Lai Chi Kok Road in Cheung Sha Wan, a Grade A office building slated for completion in 2022, to Nanyang Commercial Bank for about HKD 1.19 billion (HKD 17,500 per sq ft). 

Here’s more from JLL:

Overall net absorption was 107,200 sq ft in October. There were more instances of expansion recorded in the market, while tenants continued to look for flexibility and wellness amenities in the workplace. To meet the growing demand for flex space, business centre operator IWG leased two floors (23,400 sq ft, GFA) at Tower 535 in Causeway Bay to open a new centre. 

The leasing market was active in Central during the month. Notably, investment management firm Apollo Global Management leased a floor (13,900 sq ft, NFA) at One Exchange Square to relocate within the submarket.

Overall net effective rents rose by 0.2% m-o-m in October, the first time since the last peak in May 2019. Among the major office submarkets, both Central and Tsimshatsui registered rental growth during the month.