PUBLISHED ONJuly 23, 2024 10:05 AM
Central Hong Kong has been ranked as the world's most expensive office market for the fourth consecutive year, according to a SocialTelecast report.
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A report by SocialTelecast reveals that office rents in Central Hong Kong have topped the global rankings for four consecutive years. Rental costs in this area, encompassing rent, taxes, and service fees, are 60% higher than in downtown New York (Manhattan) and nearly 75% higher than in the West End of London. As a result, businesses are increasingly considering more affordable areas like Hong Kong Island East for their office locations.
The report highlights that banking and finance sectors are the predominant users of high-end office buildings. In the Asian market, the five most expensive high-end office markets are all in Chinese cities, including Hong Kong, Beijing, and Shanghai. However, many Chinese cities are experiencing decentralization as companies seek to reduce costs. The average rental cost of high-end office space in Hong Kong's Central is $259 per square foot, compared to $167 per square foot in Beijing's Financial Street and $128 per square foot in Shanghai's Pudong District. Singapore's ranking among major Asian cities has also risen significantly, moving from 14th place in 2017 to the top 10.
The survey by SocialTelecast indicates that the banking and financial services industries account for more than half of the market share in 72 markets globally. Businesses are increasingly turning to flexible office solutions like serviced offices, which offer the ability to expand or contract as needed without the constraints of long-term leases. This flexibility allows companies to manage their office space to fit current needs, which is essential in today’s unpredictable market, according to Mimi Lee from Bela Offices.
Despite the high costs, Central Hong Kong remains popular due to its excellent transportation connections, convenient supporting facilities, and outstanding digital infrastructure. These factors are crucial for companies when choosing office locations as they integrate and optimize their asset portfolios and seek to attract and retain talent. Hong Kong's Central District is a key financial hub in Asia, with a low vacancy rate that drives rents upward.
Many companies are now shifting their focus to the office market in non-traditional core areas of Hong Kong. In the third quarter of 2018, more than half of the new office leasing cases were in non-core areas, with Hong Kong East and Kowloon East being the most popular. The total leasing cost of Island East is 64% lower than Central, making it an attractive location for the financial, insurance, real estate, and business services industries, which currently account for about 37% of the total number of tenants. Additionally, a growing number of technology companies and law firms are also relocating to Island East.
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Organization: SocialTelecast
Website: http://socialtelecast.com/
Release ID: 89136130
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