Hong Kong office space demand outstripping supply
Hong Kong’s office markets may be faced with a shortfall of 9m sq ft by 2020, according to a special collaborative report from property consultancy CBRE, and Japanese financial services firm, Daiwa Capital Markets.
[caption id="attachment_13167" align="alignright" width="95"] IFC Tower[/caption]
The report – A 2020 Vision for Hong Kong’s Office Market – strongly urges the Hong Kong government to generate commercially viable developments by the end of 2020, and says the amount of space required equates to eight IFC Towers, based in the regions financial district.
The forecast was based on the amount of office space required to maintain the region’s projected GDP growth figures, while taking into account the amount of forthcoming office space coming onto market by the end of 2020.
According to the report, Hong Kong’s government has launched ambitious plans to build 50m sq ft of Grade-A office space in the region, but it will not rebalance the market in the short term as many of the planned developments are still in the preparation stage.
Commenting on the findings, Knight Frank’s head of research for Greater China, Thomas Lam said: "The government should speed up its plans, such as turning Kowloon East into other central business district and redeveloping the three government office buildings near Gloucester Road in Wan Chai. Otherwise, we will have to wait beyond 2020 for more office supply."
At the end of 2012, Hong Kong had more than 74m sq ft of Grade-A office space at a vacancy rate of 3.4%.