Hong Kong retains its title as the world's most expensive market. Sale in qatar | properties for Sale - property hunter
Despite the fact that rents are expected to decrease in 2019, Hong Kong will maintain its status as the world's most expensive office market, according to Knight Frank's latest Global Outlook Report. In a tale of two halves, while Hong Kong Island rentals benefit from limited supply, they will face increasing competition from lower-cost areas such as Kowloon. Despite this, Hong Kong Island rents would remain nearly 24% higher than the long-term average.
The cities with the highest rental increases in 2019 will be Melbourne and Sydney, with rents increasing by 10.1 percent and 8.6 percent, respectively. Owing to job growth and relatively low levels of construction completions in recent years, both cities are experiencing a shortage of office space. In both cities, prime rents have risen steadily in the last year, increasing by 13% in Sydney and 6% in Melbourne.
Although all cities are feeling the effects of slower economic growth and geopolitical threats, some are benefiting from strong demand for office space from tech firms, according to the Global Outlook Study. This coincides with fewer new projects being completed, as some developers have been hesitant to build in recent years due to the volatile political climate. This is putting a strain on supply and driving up rents.
According to Knight Frank's William Beardmore-Gray, Head of Occupier Services and Commercial Agency, "In 2019, occupiers will be subjected to two opposing pressures. Firms are finding it difficult to prepare for the future due to geopolitical challenges such as Brexit and the US-China trade war. Business pressures to increase market share, attract talent, and penetrate new markets, on the other hand, are forcing them to meet their real estate needs. Many occupiers may feel forced to enter the market in 2019, and purchase space until anyone else takes their preferred choice for a potential headquarters building, due to a limited supply of new offices after years of under construction."
Knight Frank's Chief Economist, James Roberts, said, "We believe there is a strong global argument for sustained rental growth in major cities around the world. Over the last few years, tight construction pipelines have resulted in leasing supply shortages, especially in the office and logistics sectors. This is accompanied by increased occupier demand, especially from the rapidly expanding tech sector. We expect that as expectations for rental growth improve, more investors will be willing to make leveraged purchases, particularly given the supply issues that exist in many global occupier markets."