Hong Kong Monthly October 2020

Research Date: Tuesday, 10 November 2020
Hong Kong Monthly October 2020 | KF Map – Digital Map for Property and Infrastructure in Indonesia

This report analyses the performance of Hong Kong’s office, residential and retail property markets.


Multinational financial institutions give up more office space.

Hong Kong Island 

Compared to the first two quarters of the year, the rental declines in the overall Hong Kong Island started to narrow in Q3, registering a 2.4% QoQ drop. Non-core districts such as Quarry Bay and Wong Chuk Hang recorded relatively mild quarterly adjustments, with a QoQ drop of 1.5% and 1.3% respectively.

As the COVID-19 pandemic showed signs of abating in September, potential tenants became more active in on-site inspections, resulting in growth in the number of transactions. Most of the new letting cases during the month were small to mid-sized premises of less than 3,000 sq ft in affordable Grade-A buildings at a relatively attractive rental level.

However, leasing activity and demand for premium Grade-A office buildings remained weak. Some sizeable financial institutions, who are heavily impacted by the coronavirus recession started to give up their office space. With the large vacant space to be returned by Nomura and Deutschem Bank due to downsizing, and from Westpac as they are closing their operations in Hong Kong. As such, we expect the vacancy rate on Hong Kong
Island increase in the coming months. The rental levels, particular in the CBD, will continue a downward trend.

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