Qianhai a potential investment alternative to Hong Kong
The zone near Shenzhen can provide the kind of low tax regime, strong infrastructure and gateway to the mainland that companies want
Despite signs of increased activity in the office market leading up to the Lunar New Year break, occupier demand in Hong Kong remains rather subdued.
Indeed, levels of net absorption, which measures the change in volume of occupied space, and therefore expansion and contraction, are running at around half the long-term average. This is unsurprising given the economic turbulence.
However, despite the lack of movement, vacancy rates continue to trend downwards and are below 3 per cent for the market as a whole.
Given that office markets worldwide generally require a level of vacancy of 6-8 per cent, the situation obviously remains extremely tight for occupiers.
It is almost six months since CBRE published a report on , which highlighted the potential shortfall in office space over the next decade, and also set out proposals to alleviate this shortage. Chief among these was the recommendation to fast-track selected sites, which we saw as being the "easy-wins" for the government and the market.
These sites are attractive in size and location, and in our view, form a "can do" list rather than a "wish list" of actions. We therefore welcome the announcement in the recent budget that these sites are to be included in the 2013/2014 land sales programmes.
