Downsizing by MNCs was partly offset by demand from the latest generation of New Economy companies.

• The first quarter was noticeably quiet in terms of transactions volumes with many tenants continuing to WFH given a ‘fifth wave’ of infections and related containment measures.
• More certainty may emerge in April/May about any possible pathway beyond COVID and this could result in more deals in the second and third quarters.
• The substantial volume of existing vacancy, combined with a very generous pipeline of new supply should offer plenty of upgrade opportunities over the next few years, with green buildings likely to prevail.
• Diminishing PRC demand and the loss of local professionals and expats are other factors limiting office demand in core areas.
• On a brighter note, there exists new office demand from companies trading cryptos and NFTs as more traditional firms are hit by regulation.
• Grade A office rents may take time to recover with high availability (both existing and future) and uncertain demand prospects over the next few years.