The amount of vacant top-tier office space has more than doubled in Hong Kong over the past three years as companies downsize operations, researchers have found, warning that demand could remain soft even if COVID-19 pandemic controls are lifted.
The data add to warnings that Hong Kong’s shine as a business hub has been dulled by political unrest and a subsequent crackdown. Pandemic curbs have also kept the territory internationally isolated while rivals reopen.
Empty Grade A office space spiked from 390,000m2 to 892,000m2 in the three years leading up to March, a report by real-estate investment firm CBRE showed.
Photo: AFP
The jump came as a result of downsizing by nearly 950 companies, it said — a record high vacancy rate.
Occupancy fell by 210,000m2 in that same three-year period — sinking to 6.78 million square meters — making up Hong Kong’s “biggest and longest office market downcycle in history,” the report said.
Rents also dropped nearly 30 percent.
“The economic recession has prompted businesses to look at the office costs more carefully and reduce office footprint over the past few years,” CBRE head of research Marcos Chan (陳錦平) said.
Hong Kong had huge democracy protests in 2019, which often spilled over into core business districts and helped tip the territory briefly into a recession.
Beijing responded with a crackdown that has purged the territory of dissent and transformed its once outspoken vibe.
Meanwhile, throughout the pandemic Hong Kong has stuck to a version of Beijing’s “zero COVID-19” strategy, quashing outbreaks with travel curbs, targeted lockdowns and social distancing rules.
Foreign businesses have chafed at the strict pandemic-era border controls, which have kept Hong Kong internationally cut off, with some multinational firms relocating their regional headquarters or some staff to rival cities such as Singapore.
CBRE said that departing firms from the US, Europe, the Middle East and Asia were behind the reduced office occupancy while mainland Chinese companies saw mild growth in their footprint.
However, “there is no evidence of a widespread corporate exit from Hong Kong,” the report said.
From 2019 to this year, most sectors cut down on office space with the exceptions being the legal, real-estate and healthcare industries, as well as government departments, CBRE said.
The firm projected “gradual and moderate” growth in office demand after Hong Kong relaxes travel restrictions, citing Chinese enterprises as key growth drivers.
“New and expansionary demand from mainland Chinese companies will grow at a rate of no less than 770,000 square feet [71,535m2] per annum,” CBRE said.
A fire caused by a burst gas pipe yesterday spread to several homes and sent a fireball soaring into the sky outside Malaysia’s largest city, injuring more than 100 people. The towering inferno near a gas station in Putra Heights outside Kuala Lumpur was visible for kilometers and lasted for several hours. It happened during a public holiday as Muslims, who are the majority in Malaysia, celebrate the second day of Eid al-Fitr. National oil company Petronas said the fire started at one of its gas pipelines at 8:10am and the affected pipeline was later isolated. Disaster management officials said shutting the
DITCH TACTICS: Kenyan officers were on their way to rescue Haitian police stuck in a ditch suspected to have been deliberately dug by Haitian gang members A Kenyan policeman deployed in Haiti has gone missing after violent gangs attacked a group of officers on a rescue mission, a UN-backed multinational security mission said in a statement yesterday. The Kenyan officers on Tuesday were on their way to rescue Haitian police stuck in a ditch “suspected to have been deliberately dug by gangs,” the statement said, adding that “specialized teams have been deployed” to search for the missing officer. Local media outlets in Haiti reported that the officer had been killed and videos of a lifeless man clothed in Kenyan uniform were shared on social media. Gang violence has left
US Vice President J.D. Vance on Friday accused Denmark of not having done enough to protect Greenland, when he visited the strategically placed and resource-rich Danish territory coveted by US President Donald Trump. Vance made his comment during a trip to the Pituffik Space Base in northwestern Greenland, a visit viewed by Copenhagen and Nuuk as a provocation. “Our message to Denmark is very simple: You have not done a good job by the people of Greenland,” Vance told a news conference. “You have under-invested in the people of Greenland, and you have under-invested in the security architecture of this
Japan unveiled a plan on Thursday to evacuate around 120,000 residents and tourists from its southern islets near Taiwan within six days in the event of an “emergency”. The plan was put together as “the security situation surrounding our nation grows severe” and with an “emergency” in mind, the government’s crisis management office said. Exactly what that emergency might be was left unspecified in the plan but it envisages the evacuation of around 120,000 people in five Japanese islets close to Taiwan. China claims Taiwan as part of its territory and has stepped up military pressure in recent years, including
RSS