Hong Kong’s Central district to see further 5 per cent gain in office rents this year, Nomura says
- Demand from co-working firms and limited space outside Central to push up office rents in 2019
The world’s most expensive place to rent office space may be about to get even costlier amid higher demand from co-working firms, according to Nomura.
The cost of renting office space in Hong Kong’s main business district, Central, will rise by up to 5 per cent this year, according to an adjusted forecast by Nomura analyst Joyce Kwock on Monday.
The revised estimate marks a 180 degree turn from the bank’s prior estimate for a 5 per cent drop in office rental rates this year. Kwock cited higher demand from financial institutions, slowing decentralisation by law firms and limited space outside Central as additional factors for the revision.
“At present, there are more than 50 [co-working] operators at more than 80 locations in the city, covering more than 1 million square feet. Many new operators, especially those from mainland China, are still eager to establish a foothold in the city,” Kwock said in the report. “China funds’ expansion into Hong Kong and take-up of prime office space in Central was another major trend.”
The asking rent for prime office space in Central ranged from HK$97 (US$12.36) to HK$192 per square foot in November, according to figures from CBRE.
Kwock said a factor driving the market last year was uptake by mainland Chinese asset management firms eager to grow their investments outside China.
