Hong Kong has more vacant office space than ever before — with more on the way
Construction on state-of-the-art space continues even as demand declines to record-lows
It’s pretty vacant.
Construction of office space in Hong Kong — the world’s most expensive — is on the rise despite the fact that there is more open space available than ever before.
Bloomberg News is reporting there is 158 football fields worth of space — or about 9.1 million square feet — already on the market, yet construction continues as some of Hong Kong’s property tycoons press forward with new office blocks that will be ready to be occupied next year.
The reason for the glut is, of course, the pandemic, which has sealed the border between the global financial hub and mainland China, whose companies occupy 30 percent of space in the city’s prized Central district — up from five percent in 2008. That means those companies are starting to focus more on properties on the mainland, where research or meetings can more easily take place, leaving Hong Kong in the lurch.
On top of the China syndrome, International banks have been giving up space in Hong Kong in order to bring down costs, Bloomberg reports. Britain’s Standard Chartered and France’s BNP Paribas both left floors in their headquarters in the city about a year ago as Hong Kong’s virus controls, which includes an up to 21-day quarantine days for arrivals, leave few incentives for foreign firms to occupy more space in the city, according to the report.
But that hasn’t stopped construction. Henderson Land Development is building a Zaha Hadid Architects-designed flower shaped glass tower across the road from CK Asset Holdings redevelopment of the 1970s-era Hutchison House into a new skyscraper. Both will open next year, but information as to who will actually rent the space has been limited.
Other districts in Hong Kong, including Kowloon East and Victoria Harbour, are also getting plenty of new office space, and the total new supply will equal 4 million square feet across the land by 2022. Of all that space, just 3 percent is tied to a lessee, according to Bloomberg.
That newer, state-of-the-art office space may end up sucking up tenants moving from older locations, according to the news site, which could pressure current landlords to upgrade their properties.
[Bloomberg] — Vince DiMiceli