Grade A Office Rents in Mild Downward Adjustment of <1% in Q1 2022, Activities Expected to Increase in 2H 2022

Short-term retail leases in high demand

Expected boost of retail spending with Consumption Voucher Scheme roll-out

HONG KONG SAR – Media OutReach – 7 April 2022 – The fifth wave of the pandemic outbreak stalled the recovery of leasing activities and dragged the rental downwards in the Hong Kong office and retail markets since the second half of Q1 2022. Despite this, the overall Grade A office rental level dropped by less than 1% q-o-q. With the pandemic situation starts winding down, and with new development projects due to complete, we expect the office leasing market to regain its momentum in the second half of the year. For the retail market, local retail sales in the first two months of 2022 dropped to a record low since the beginning of the outbreak, subsequently pulling down rents in the major retail districts by 3% q-o-q. However, with social distancing measures set to be eased in phases, combined with the beneficial knock-on effects of the Consumption Voucher Scheme, retail leasing activity is expected to recover after Q2 2022.