A mixed picture of rental development is reflecting business uncertainty as well as local market dynamics.

• Hong Kong Island and the New Territories saw very mild rental declines of 0.4% and 1.7% respectively over the quarter.
• Luxury rents in Kowloon rose by 1.2% in the quarter due to leasing activity over the summer when families traditionally move to prepare for the new school year.
• Landlords are more willing to offer longer rent-free periods and early handovers as incentives. Short lease terms of one year are also becoming more common.
• Townhouse rents recorded a mild fall of 0.8% in Q3/2020, representing a sixth consecutive quarter of rental decline.
• Serviced apartments offered a series of promotions to rescue occupancy levels. Serviced apartments and serviced offices, which offer flexible lease terms for home and corporate renters, are popular given concerns over the tough operating environment faced by many businesses.
• The next quarter (Q4/2020), the traditional low season, is expected to be challenging due to fewer arrivals in the economic recession.