Medical, sports and wellness sectors to become the new growth drivers of the post-pandemic leasing market
- Overall Grade A office rental level in Q2 2022 fell by 0.8% q-o-q, slightly less than the 0.9% q-o-q drop seen in Q1, with a 2022 full-year decline now predicted at 2% to 3%
- Increased demand from the healthcare and medical aesthetics sector, together with serviced offices and co-working space operators, is now expected to be new drivers of office absorption.
- Despite the overall retail market remaining weak, vacancy rates have lowered while rental decline narrowed compared to last quarter.
- Rent for F&B outlets is expected to rise by 1% to 5% in 2H 2022, offsetting the decline from January to June. Overall F&B rental level for 2022 is expected to remain stable.
HONG KONG SAR – Media OutReach – 7 July 2022 – Global real estate services firm Cushman & Wakefield today published its Hong Kong Office and Retail Leasing Markets Review and Outlook Q2 2022 report. With the easing of the fifth wave of the pandemic since April, office market leasing activity has gradually recovered, and the retreat in Grade A office rent has moderated again, at 0.8% q-o-q. Mild negative absorption has been recorded, pushing availability slightly upwards. On the other hand, overall performance in the retail market has been relatively weak, with dampened total retail sales in the first five months of 2022. Overall rental levels in major retail districts have remained steady. The lifestyle products, sports and wellness sectors have grown amidst the pandemic period and emerged as new drivers in the domestic retail market. Consumer confidence is expected to recover gradually as a result of a new round of the Consumption Voucher Scheme, stimulating retail leasing activities in 2H.