The office and residential sectors in Hong Kong have experienced increased vim and vigor of late, according to various reports.
In first quarter 2015, Hong Kong (Central) ranked second only to London’s West End in terms of office occupancy costs, with Hong Kong coming in at $254.23 per square foot per year to London’s $267.14, according to CBRE Research’s latest Global Prime Office Occupancy Costs survey.
Class A office sales and leasing in Hong Kong remain strong, with prices reaching a new record high in May and rents making gains in the CBD (but decreasing in the CBD2), notes Knight Frank’s June Hong Kong Monthly.
According to Knight Frank, the Mutual Fund Recognition Scheme, which will allow “funds domiciled in Hong Kong and China to be sold in each other’s markets,” should lift leasing demand for office space in Hong Kong from related firms, including funds, banks and asset management. The new scheme goes into effect July 1.
In the residential sector, a new study from Bank of America Merrill Lynch expects housing prices in Hong Kong to rise by 10 percent this year after gaining 13 percent in 2014 given limited supply.
Knight Frank also indicates an investment bank anticipates prices for luxury residential assets in Hong Kong to surpass the mass market during the next 12 to 18 months in part because of Hong Kong’s improving stock market as well as a sustainable recovery in luxury residential rents.
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Jennifer Molloy is editor of The Institutional Real Estate Letter – Asia Pacific.
