New “0+3” quarantine measure to help reignite business travel, although no immediate boost to tourism activities is anticipated
- Hong Kong’s Grade A office market remained generally quiet in Q3, but pre-commitments at new project completions pushed up citywide net absorption to reach 183,000 sq ft
- Overall office rents fell by a further 2.3% q-o-q, although the decline is expected to narrow in Q4, with the full-year rental movement forecast now in a -3% to -5% range
- The retail market is recovering slowly, with retail sales in the first eight months down by 1.5% y-o-y; some retailers have held back on expansion plans in response to a still uncertain timeline for a full border reopening with mainland China
- The recently announced “0+3” quarantine measure will help stimulate outbound spending but may not immediately attract an influx of tourists to Hong Kong, weighing on the short-term retail recovery
HONG KONG SAR – Media OutReach – 6 October 2022 – Global real estate services firm Cushman & Wakefield today published its Hong Kong Office and Retail Leasing Markets Review and Outlook Q3 2022 report. Office and retail leasing activities were both relatively quiet in Q3. Overall office market net absorption returned to positive territory on the back of pre-commitments at new projects within the Hong Kong East district. Nevertheless, a rise in the availability rate saw rents trend downward at -2.3% q-o-q in Q3. The local retail market also remained weakened, with total retail sales for January to August 2022 recorded at HK$226.7 billion, down 1.5% y-o-y. While the latest “0+3” quarantine rule for inbound travelers may not immediately boost tourism to Hong Kong, it may instead spur locals towards outbound travel and hence impact short-term domestic retail sales.