Hong Kong Faces Office-Space Shortage Unless Economy Shrinks, Survey Says
Hong Kong’s new grade-A office space supply will fall short of demand unless the city suffers a sharp economic contraction, according to a Royal Institution of Chartered Surveyors study.
A total of 5.25 million square feet of office space is estimated to be built from 2011 to 2014, the institution said in an e-mailed statement yesterday. The 1.3 million square feet of additional annual supply is a “substantial decline” compared with the 1.9 million square feet added each year between 1995 and 2011, according to the study done by CB Richard Ellis Group Inc. (CBG) on the institute’s behalf.
The level of supply will only meet demand should the city’s annual economic growth fall by 5 percent, it added.
“ The underlying strength of the Hong Kong economy, however, suggests that there will be a further fall in vacancy rates in the very near term,” it said. “Respondents believed multinationals will be deterred from entering or expanding in Hong Kong because of the shortage in office space.”
In a response to the institute’s report, Hong Kong’s government said it is trying to provide more office sites and has enlarged the Central Business District to include neighboring Sheung Wan, Admiralty, Wan Chai, Causeway, Tsim Sha Tsui and West Kowloon, according to a statement on its website yesterday.
It has further encouraged businesses to decentralize their offices by investing in transport infrastructure, the statement added.
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To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net
To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net
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