Hong Kong office landlords in ‘defensive’ mode amid supply glut, relocation trend

Hong Kong office landlords are increasingly in a “defensive” position amid a supply glut that is driving tenants to upgrade to better and cheaper locations and facilities, according to analysts.

“The flight to quality of existing tenants within Hong Kong is absolutely going to continue with all the new supply coming in the next three to four years,” said Sam Gourlay, head of the office leasing advisory at JLL for Hong Kong Island. “We will see downward rental pressure on grade B and grade A-minus office space. Our forecast is a 5 to 10 per cent decline in office rents this year.”