• Crypto-currency trader breaks office rental record

    28 September 2018

    (27 September 2018, Hong Kong) – Knight Frank launches the latest Hong Kong Monthly Report. The Grade-A office leasing market on Hong Kong Island recorded a high level of activity with buyers and tenants competing for limited space available. Kowloon’s Grade-A office leasing market saw significant improvement in August, with the number of leasing transactions more than doubled month-on-month. Residential sales, however, lost a notable 21% month-on-month in August to 4,882 units, as the market is clouded by uncertainties from the new government measures, the escalating Sino-US trade war, stock market volatility and the fear for further mortgage-rate rise. While the overall prime street retail market in Hong Kong is recovering thanks to improved retail sales, those in Central lagged behind.

    Grade-A Office

    Hong Kong Island

    In August, the Grade-A office market on Hong Kong Island recorded a high level of activity with buyers and tenants competing for the limited space available. Cheung Kong Center recorded a remarkable leasing deal. American Bitcoin exchange platform Bitmex rented over 20,000 sq ft of space at a rent of HK$225 per sq ft per month. With shrinking availability and sustained demand, office rents on Hong Kong Island will inevitably rise further.

    Kowloon 

    Kowloon’s Grade-A office leasing market saw significant improvement in August, with the number of leasing transactions more than doubled month-on-month. The relocation movement continued mainly towards Tsim Sha Tsui. The escalating Sino-US trade war is beginning to affect trade-related companies. However, overall demand on the peninsula is expected to remain strong.

    Residential

    Residential sales lost a notable 21% month-on-month in August to 4,882 units, as the market is clouded by uncertainties from the new government measures, the escalating Sino-US trade war, stock market volatility and the fear for further mortgage-rate rise.

    Home prices, however, grew further for the 28th consecutive month, according to latest official data. They are now 29% over the previous peak in September 2015, but the growth rate was the slowest in the past 10 months. David Ji, Director and Head of Research & Consultancy, Greater China, expects them to grow at a slower rate in the second half of the year, gaining 10-13% over the whole year. Looking ahead, luxury residential rental growth will slow down in the coming months as the market enters the low seasons.

    Retail

    In the first seven months of this year, Mainland visitor arrivals was up 12.5% year-on-year to 28.1 million, faster than the overall 9.4% growth. Retailers are doing their best to capture this burgeoning group of customers, who have a strong preference for personal care products. More tourists have also helped restaurant receipts to increase 8.3% in the first half of the year.

    While tourists from Mainland is still the driving force for the growth of Hong Kong’s retail market, the depreciation of renminbi amid the intensifying trade tension poses a downside risk, which makes spending in the city more expensive for Mainland visitors.

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