New demand drivers are emerging as limited supply on Hong Kong island suggests continuing support for rents, even if room for strong growth is limited.
Kowloon East rents posted the strongest performance among all sub-markets, rising by 1.3% during the quarter.
Kowloon rents outperformed Island rents over Q2/2019.
Availability in core areas will remain tight as new supply out to 2023 will be concentrated in non-core districts.
Family offices and virtual banking are emerging as two new demand drivers in the office leasing market.
Completion of new transport infrastructure will support further decentralization as the accessibility of non-core business districts will be greatly improved.
A modest increase in vacancy rates has reduced the bargaining power of landlords, weakening rental growth on Hong Kong Island.