SURGING office rents in Hong Kong are prompting firms to shift out of the city s most expensive towers as competition for prime space heats up along with the region s growth.
Prime office rents in the Central business district soared 34 percent in the six months ended September from a year earlier, the biggest gain worldwide, according to property broker CB Richard Ellis Group Inc. Office rents in the area could climb as much as 30 percent next year, said Gavin Morgan, head of markets at Jones Lang LaSalle Inc.
Top-tier buildings such as Cheung Kong Center and International Finance Center have raised rents as banks including HSBC Holdings Plc. and Barclays Plc. expand after the financial crisis. The city now has the world s most expensive occupancy costs after London s West End.
Tenants in Central are reassessing whether it s still within their budget to stay in the district, said Simon Lo, Hong Kong-based director of research and advisory at Colliers International. Some tenants such as professional services or consulting firms have a much lower threshold for rents, he said. Cheung Kong Center, the 12-year-old office building owned by Li Ka-shing, Hong Kong s richest man, may see as many as five tenants move out by the end of 2011, according to people with knowledge of the matter.
The IFC towers I and II, both owned by Sun Hung Kai Properties Ltd. and Henderson Land Development Co., are seeing at least three tenants depart this year and next.
Occupancy costs, which include rent, taxes and service fees, were US$184.21 a square foot a year in Central, compared with US$193.69 in London s West End, according to a report from Los Angeles-based CB Richard Ellis. (SD-Agencies)
