Multiple rental transactions in CBD suggest strong performance

Despite general silence near year-end.

It has been observed that in spite of the general quietness near the end of year, there were multiple rental transactions recorded in the office sector, suggesting a strong performance.

According to a research note from Barclays, at the other end of the spectrum, retail transactions continued to show a significant decline in rents. For instance, Xinhua Insurance signed an office lease for 8,000sf of space in Two IFC in Central. The monthly rent is reportedly HK$160psf per month.

Office space in Central is in short supply and such large space listings are relatively rare, and Sing Tao Daily said that the lease was secured after Xinhua outbid seven prospective tenants. The lease is for Xinhua’s business expansion.

Here’s more from Barclays:

Meanwhile, Entertainment Building in Central also recorded a lease for 6,055sf of office space at a monthly rent of HK$85psf, and Eight Queen’s Road Central recorded a lease for 3,012sf of office space at a monthly rent of HK$80psf.

Megabox recorded a pre-lease of 18,000sf of office space at a monthly rent of HK$28psf.

A prime space in Percival Street in Causeway Bay, the ground floor of no. 76, was leased to the brand Folli Follie at a monthly rent of HK$900,000. The reversion is -50% compared to the previous lease.

Pacific Alliance Group (PAG) bought an en-bloc industrial building in Kwai Chung from Goodman for HK$1.4bn. Against a GFA of 266,200sf, the ASP works out at HK$5,259psf. The initial yield is about 3%. The building is currently used as a cargo consolidation complex.