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Weekly snippet | Opportunities for both office and retail occupiers in core locations

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Across the office and retail sectors, landlords have become more flexible and are open to negotiation to secure longer and preferable lease terms. The Hong Kong Market Outlook 2021 hinted at softer leasing momentum but anticipated the office sector would bottom out by Q2 with retail experiencing an uptick from the low base experienced in 2020.

As we approach the end of first quarter, we hear from two of our leading brokers, Cynthia Ng, Retail Services and Ivan Wong, Office Services, on what key movement they are seeing in the market on the ground, and how that compares to the forecasted Market Outlook.

Retail:

Lifestyle fashion retailers are leveraging adjusted rental rates to expand their presence on tier one high streets, in core retail locations. For instance, American fashion clothing retailer American Eagle has leased a new location at 31-31A Queen's Road Central, taking a duplex over the ground and first floor of LHT Tower, which includes a portion of the ex-GAP space.

Looking forward, we expect to see more lifestyle trades capture local consumption and expand, which includes supermarkets, approachable modern dining concepts, athleisure fashion, and home living brands. Neighbourhood malls will continue to perform well as consumers spend more time in rural areas and neighbourhood locations. It’s not anticipated that there will be a significant change in rental rates or sales in Hong Kong’s retail sector throughout the remainder of the year. However, the introduction and rollout of a successful vaccine programme and the re-opening borders have the potential to impact the market but it’s dependent on timing.

Office Leasing:

Post Chinese New Year, we witnessed an increase in the level of leasing activity and transactions across the market amidst a softened environment. This continued sentiment is providing greater flexibility and options for occupiers to flex their real estate strategies in line with changes to the needs of the office space. For instance, in Tsim Sha Tsui and Kowloon East, occupiers in the technology sector were able to identify excellent solutions and work with landlords of strong branded portfolio buildings, offering attractive rental packages.

The lifted vacancy rate in core districts also allows occupiers to explore opportunities to re-centralise their footprint from non-core areas and consider re-brand opportunities as landlords are showing greater flexibility and more negotiable. It’s expected to see more re-centralisation leasing in the upcoming quarters.

If you would like to know more about the market, or what options face you as a real estate professional or occupier in Hong Kong, don’t hesitate to contact our experts to see how we can help accelerate the growth of your business.


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Cynthia Ng

Executive Director

Retail Services

Hong Kong

Cynthia Ng is an award-winning retail services veteran with more than 14 years’ experience.  Cynthia was educated in Sydney and holds a bachelor degree in Construction Economics (Quantity Surveying) from University of Technology, Sydney.  She started her career with major developers in Sydney and has spent the last 11 years in Hong Kong with global property agencies working across all key retail sectors and high-profile fashion, F&B and international FMCG brands.

As Executive Director of Retail Services, Cynthia leads the successful operation of the retail brokerage business, meeting the needs of the company and her clients, while cultivating a team with the best leasing advisory and negotiating skills.

Prior to joining Colliers, she worked in CBRE as Director of Hong Kong Retail, with a key focus on international brands entering and expanding in Hong Kong. In 2015 she won the ‘Excellence in retail services’ award from CBRE, recognising her achievements in business.

 

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Ivan Wong

Director

Office Services

Hong Kong

Ivan is the Director of our Kowloon Office Services team and is responsible for providing  strategic space planning and leasing service to the corporate clients, particularly in strategic advice in relation to lease renewals and relocations of business units.Ivan has extensive experience across a diverse range of industry occupiers and conducts project leasing and financial analysis services for clients, as well as undertaking traditional brokerage work.

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