Date
17 October 2017
CBRE's Marcos Chan said rents for prime office space in Central are likely to surge by as much as 10 to 15 percent in the second half. Photo: HKEJ
CBRE's Marcos Chan said rents for prime office space in Central are likely to surge by as much as 10 to 15 percent in the second half. Photo: HKEJ

Stock Connect seen boosting prime office demand in Hong Kong

Demand for prime office space in Hong Kong is likely to surge as the city’s stock trading link with mainland China expands.

Following the launch of the Shanghai-Hong Kong Stock Connect, more financial and related corporations, especially those backed by mainland capital, are setting up branches and offices in the city, said Marcos Chan, CBRE head of research for Hong Kong, Macau and Taiwan.

And as a result, landlords are expected to raise rents aggressively in the second half of the year, with those of office buildings in Central likely to surge as much as 10 to 15 percent, or 5 to 10 percent in general, Chan said.

Aside from the stock trading link with Shanghai, authorities are also planning to launch the Shenzhen-Hong Kong Stock Connect this year.

It has been reported that the links may later be expanded to cover bonds and commodity trading, and this will greatly bolster Hong Kong’s capital markets, given that the mainland has about 18 trillion yuan (US$2.9 trillion) in savings, according to the newspaper.

Mainland companies now account for 23 percent of the office space in the city’s central business district, up from 19 percent last year and 12 percent in 2008, Chan said.

Chinese enterprises have contributed 30 to 40 percent of office transactions across Hong Kong over the past few years, he added. 

A CBRE report projects there will be 1.9 million square feet of new prime office supply in the city in the coming five years, with over half of them in East Kowloon.

Translation by Vey Wong

[Chinese version中文版]

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