Hong Kong Central Office Vacancies Surge Amid Growing Unrest
Central, the city’s most prominent business district, saw office vacancy rates soar to a three-year high in July.
(Bloomberg) -- Hong Kong’s anti-government protests are starting to take their toll on the world’s costliest office market.
Central, the city’s most prominent business district, saw office vacancy rates soar to a three-year high in July, Jones Lang LaSalle Inc. said Monday. Mounting global economic woes have also diminished demand from overseas companies, according to Alex Barnes, the group’s head of markets in Hong Kong.
Central is the world’s priciest market for premium office space, figures from CBRE Group Inc. show. Occupancy costs in the area were $322 per square foot per year as of the first quarter. London, the second most expensive location, comes in at just $223.
Office investment is also showing signs of weakness. “In the office investment market, few properties changed hands during the month as investors digested the heightened uncertainty around the global economic outlook as well as the escalating civil unrest,” said Denis Ma, JLL’s Hong Kong-based head of research.
The protests that have gained momentum since early June are set to continue. Hundreds of thousands of people marched on Sunday despite heavy rain to demand for the formal withdrawal of the now-suspended extradition bill as well as an investigation into alleged police brutality.
The prolonged demonstrations are already weighing on other parts of the real estate market. The amount of residential property traded in July -- when clashes between police and protesters turned more violent -- was recorded at HK$47.8 billion ($6.1 billion), down 35% from last year, according to Ricacorp Properties Ltd.
To contact the reporter on this story: Shawna Kwan in Hong Kong at wkwan35@bloomberg.net
To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Philip Lagerkranser
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