Cushman & Wakefield Foresees HK Office Rents to Drop 7-9% in 2024, Street Shop Rents to Grow 2-7% in 1H24Looking in hindsight at the performance in 2023, John Siu, Managing Director, Cushman & Wakefield Hong Kong, said the overall business climate remains cautious amidst the uncertainties in the global economy, and cost control remains a top priority for enterprises.
As such, office leasing activities have not marked any evident rebound after reopening, with the outstanding rental rate being higher to the 18% level.
Office rentals, as a result, have come under pressure. The overall Grade A office rents have sagged 7.2% year-to-date as at the end of November.
In Siu’s opinion, the pace of new office leasing after reopening was slower than the market's earlier expectation.
This, coupled with the fact that there may still be new supply projects completed before the end of the year, the outstanding rental rate will inevitably be shored up to over 19%, even above the record high of 18.1% in the first quarter of 2004.
In addition, given nearly 1.2 million square feet of new Grade A office space completing next year, office rents were expected to continue to adjust downward by 7%-9% for the year.
Kevin Lam, Executive Director at Cushman & Wakefield, separately said that looking ahead to next year, he believed that more shops in the retail market will upgrade and consolidate activities to the core locations, with consumers attaching more importance to experiential consumption.
This will help to improve the vacancy rate, which in turn will support the performance of rents.
He expected that the rents of street shops in various districts in the first half of next year will be able to maintain a
single-digit growth of 2%-7%.Source: AAStocks Financial News
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