Even though the average office rental in the region has seen a decline during 2Q2011, investor sentiment still remains positive, with many firms still believing in the expansion and upgrading potential of the leasing market in Hong Kong:

1.

Hong Kong boasts low corporate and income tax, a stable government, excellent geographical location and economic freedom. As such, many international companies have made Hong Kong their headquarters, contributing to traditionally high demand in the Hong Kong commercial property market. There are no restrictions on any individual or corporation, whether domestic or overseas, to own Hong Kong real estate. Detailed information can be found on the Hong Kong Inland Revenue Department website. Hong Kong commercial property market prices improved with capital values for strata-title office buildings in main business districts increasing in the 1st quarter of 2011.

2.

Overall, the average Grade A office rental rate saw an increased 4% quarter on quarter to almost HK$68 per sq ft per month (May 2011).

3.

The Asia Pacific Region is expected to see a 2% rise in occupancy costs over the next 4 years. Hong Kong has become one of the most expensive business hubs to establish a business in and is expected to surpass Tokyo in regards to occupancy costs. Occupancy costs per workstation have increased by 31% in 2010. Hong Kong also remains as one of the most expensive locations in the Asia Pacific Region. According to DTZ Global Occupancy Costs Report 2011, Hong Kong’s Total occupancy cost per workstation per annum is close to $24,000 USD.

4.

Healthy demand for office space is expected in 2011 on the back of improving economic conditions, according to the CB Richard Ellis Hong Kong report. Rental growth will likely be unchanged in the first half of the year, especially in areas such as Central. However, it is expected that demand for office space will increase especially in Kowloon, where new office buildings are being constructed. Rents are forecast to increase, where strongest growth was reported in the district of Sheung Wan.

5.

The current economic climate has made it increasingly challenging to obtain finance to support Hong Kong commercial property market investment. Healy Consultants assists clients obtain the most competitive international mortgages for their investment by working with international banks such as HSBC, ANZ Bank, DBS Bankand OCBC Bank.

For more information on the Hong Kong real estate, call our Hong Kong office at (+852) 8331 1911 or contact us at email@healyconsultants.com