Hong Kong Remains Most Expensive City to Rent Office Space
Rental rates for Grade A office space in Hong Kong average at US$213.70 (HK$1,666) annually, per square foot. In comparison, London’s annual average per square foot comes in at US$150.20 and Paris at US$111.92.
This average is up by 32.3% from mid-2010, and despite a slowdown during 2012, Hong Kong is still expected to remain the most expensive.
The reason behind these statistics is due to the lack of vacant properties in the city, as Hong Kong has the lowest vacancy rate in Asia, at 3.7%. Although there is demand for more office space and company expansion, it’s thought that there will be little development in the near future.
In fact, only 456,225 square feet of new office space was under construction in Hong Kong as of June 2011, which is the smallest amount when compared to other Asian cities. This is a huge contrast to cities across the border in China, where Guangdong has been named the most active city in the world for office space development, with 31.3 million square feet of office space being constructed.
The lack of office space supply in Hong Kong means companies may be forced to change their strategies from business expansion to securing cheaper tenancy rates. However, when vacancy rates are below 5%, the trend for rent to increase is the only viable option.
Companies who wish to expand may need to consider relocating in order to find cheaper rates. In other Asian cities, including Beijing, Shanghai and Tokyo, more than 5 million square feet of office space is under construction, so a visit across the border may be the only option for businesses based in Hong Kong.
To find out more about office space in Hong Kong, talk to Search Office Space now on 0800740 80 80 to discuss your requirements.