Hong Kong commercial property market has been on a continuous upsurge since January 2018. Considered one of the most expensive real estate markets in the world, Hong Kong is a haven for investment as real estate prices are increasing at an exponential rate here.
The demand for office spaces is rising on the back of a growing economy and booming labor market. As the economy of the country sees growth, companies are expanding their businesses and demanding more land for offices leading to a surge in prices and rental values for commercial properties. The limited supply of real estate and a positive consumer sentiment regarding the economic boom are other factors that are pushing property prices in an upward spiral. Investors across the world are utilizing this opportunity to the maximum and investing heavily in the hopes of a windfall.
The rise in demand and subsequent push of prices is evidenced by the fact that office rents in Hong Kong are rising at very high pace. According to the latest report by JLL, rents in Hong Kong office market rose 1.1% month-on-month in April 2018, in comparison to a mere 0.2% growth in March 2018. This is the fastest pace at which rents have increased in the past two years. Most of the demand is concentrated in the regions of Hong Kong East and Kowloon, which together accounted for almost 76% of all new lettings.
As per the latest reports from the government, unemployment levels in Hong Kong are at a record low in the past 20 years. Combined with a strong economic climate this is going to lead to a rise in demand for the leasing of office spaces and rentals. The demand from PRC companies and flexible workspace operators is another factor that is driving the demand for office spaces.
With a positive outlook for the future, specifically Finance, Insurance & Real Estate sectors, Hong Kong commercial property market seems ripe for savvy investors to make long-term gains.