CBRE’s newly released report reveals that prime office occupancy costs are growing at a faster rate than they were this time last year, with an overall faster annual increase at 3.2%. Without surprise, Hong Kong’s Central district made it to the top of the list again in three consecutive years.
Hong Kong’s Central remains the most expensive location in the world
As vacancy in Central dropped to 1.1%, the lease of grade A buildings such as the International Finance Centre (IFC) have risen by 1.7%. The average annual rent in Central rose to US$306.57 per square foot as of Q1 2018. This is 30% more than the rental cost in London’s West End at US$235.01 per square foot, and tripled Singapore's price at US$100.74 per square foot.
Flexible-space operators are driving change in the office market
Office leasing activities have been particularly robust in APAC, and flexible workspace operators have been highly active this quarter.
“The battle for coworking dominance will get serious in 2018.” Prediction made by Cushman & Wakefield’s latest coworking trends report.
With increasing demand from startups and SMEs who prefer a more flexible work environment in Asia, office space operators have proliferated. Coworking giant WeWork has announced big plans for Asia, looking to open a new Hong Kong location at LKF Tower. In addition, it is also planning on expanding into 8 additional Chinese cities, including Xi’an, Shenzhen, Suzhou, Hangzhou, Xiamen, Chengdu, Nanjing, and Wuhan.
Companies are moving away from Central
Private office in Sheung Wan, view listing here.
Due to the intractable increase in rental price, multinational companies and large banks are forced to move out of Central to other districts. Just 10 minutes away from Central, the average office rental price is in Sheung Wan is often much lower, and you can rent an office for half the price in Quarry Bay.
Find offices in other districts here.