Hong Kong has long been the gateway for foreign companies seeking to do business in China. Now, the balance of economic power is shifting, and the city is adapting to help Chinese corporates do business with the rest of the world.
Hong Kong is one of Asia-Pacific’s largest financial centres and consistently ranks highly in global competitiveness surveys. In 2017, it was named as the world’s freest economy by the Heritage Foundation for the 23rd consecutive year. Hong Kong is one of the world’s pre-eminent IPO fundraising centres, and has a very active foreign exchange market, including the deepest and most liquid renminbi market outside of mainland China. It also offers established rule of law, low corporate and personal taxes, and a currency pegged to the US dollar. Combined, these factors make Hong Kong an ideal platform for Chinese MNCs, as well as start-ups based across the Pearl River Delta, to base their forays into global markets.
References: New Financial Sector Dynamics Re-Shape Hong Kong’s Office Market
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In the last 10 years, around 18 million square feet of office space has been built in Hong Kong, representing approximately 20% of the current total.
Hong Kong’s Central district remains one of the most sought-after CBDs in the world. Landmark office buildings are complemented by first-class hotels, luxury retailing, excellent public transport connections, and interconnected walkways. But other districts are now attracting tenants away from the city’s traditional office hub.
Financial and professional services firms and legal practices are already relocating eastwards to Quarry Bay, keen to take advantage of a major redevelopment of the area and the Central-Wanchai Bypass, which will cut down commuting times significantly. Other corporates are making the move across Victoria Harbour to Kowloon East, an area at the heart of the Hong Kong government’s regeneration plans and the site of an emerging CBD, as well as large-scale residential and retail developments.
With the development of these districts and more, Hong Kong’s office market is embarking on an unprecedented growth spurt. The changes that lie ahead will provide immense opportunities for both occupiers and investors alike.
References: A Space Odyssey: Will increasing new supply lead Hong Kong’s Grade A office growth over the next 10 years?