Hong Kong's grade A office market remained in the doldrums in the first quarter as tenants continued to move to cheaper locations, or scale down space requirements.
The cost-cutting drive in response to the global financial crisis and fresh new supply coming to the market would keep rents in the sector under downward pressure, agents said.
A total of 401,024 square feet of office space on Hong Kong Island was surrendered by tenants in the first quarter and together with declining new demand, vacant office space on the island rose by 472,392 sqft from previous quarter, according to DTZ.
In the core office district of Central/Admiralty the vacancy rate has now been on a sustained rise from 1.2% in the third quarter of last year to 2.1% in the final quarter of last year, and 3.7% in the first quarter of this year.
South China Morning Post