Grade A office rents are now in their longest downcycle since the Global Financial Crisis.

• Overall rents fell by 3.4% in Q3/2020, with Hong Kong Island rents and Kowloon rents falling by 5.8% and 1.3% respectively.
• Wanchai/Causeway Bay recorded the largest decline (-6.6%) among all office sub-markets.
• Decentralization remains popular among corporates given the rental gap between Central and other districts.
• We have noted leasing demand from PRC companies from a diverse range of industries, from distribution to social media.
• Vacancy rates in Central and Tsim Sha Tsui rose to 6.8% and 6.0% respectively in September, due to the relocations of major anchor tenants.
• With major forecasters expecting more favourable GDP growth rates in 2021 we expect overall Grade A rents to fall by 2.5% to 5.0% next year following a decline of 15% to 20% over 2020.