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HONG KONG

Office demand from PRC companies remains intact despite stock turmoil

PRC firms account for 45% of new lettings in July


HONG KONG​, 24 August 2015 – The recent stock market volatility in mainland China had little immediate effect on leasing demand from PRC companies, according to JLL's Hong Kong Property Market Monitor research report this August.

Supported by robust growth in Central (79,100 square feet) and Wanchai/Causeway Bay (41,100 square feet), net take-up in overall office market amounted to 253,000 square feet in July. In Central, PRC financial services and securities trading firms accounted for about 45 percent of new lettings. Bank of Shanghai expanded in-house at Citibank Plaza while another PRC bank leased a whole-floor office at AIA Central for its newly established investment banking division.

Paul Yien, Regional Director of Hong Kong Markets at JLL, said: "PRC companies were still the most active cohort in the office leasing market despite the recent fluctuations of Mainland stock markets. The Shanghai–Hong Kong Stock Connect, along with plans to open up more cross-border investment channels between Hong Kong and mainland China, continues to give them the confidence to expand or set up their businesses in Hong Kong. These companies also planned to use Hong Kong as a stepping stone to expand their businesses overseas to seek investment opportunities,"

"Most PRC companies were looking for Grade A office space in Central, with offices around 5,000 to 10,000 square feet being the most popular. In the long run, we will see these firms continue to expand in Hong Kong," Yien added.

Driven by expansion requirements from a handful of occupiers, the net take-up in Wanchai/Causeway Bay reached a two year high in July.

With availability in Central tightening, the International Commerce Centre (ICC) in West Kowloon became as popular option for tenants seeking premium Grade A office space. Vacancy in the building declined from 6.1 percent at the end of June to 3.2 percent at the end of July after successfully securing several tenants from the financial services and IT sectors.

Grade A office vacancy rates
DistrictsOverallCentral

Wanchai/

Causeway Bay

Hong Kong EastTsimshatsuiKowloon East
End-July3.2%1.4%2.0%0.8%1.7%5.9%
End-June3.5%1.7%2.3%1.0%1.5%6.1%

Source: Research, JLL

 

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