Hong Kong Retains Title as Most Expensive Market in the World
According to Knight Frank's latest Global Outlook Report, Hong Kong will retain its title as the world's most expensive office market despite rents being forecast to decrease in 2019. In a tale of two halves, Hong Kong Island rents, while benefiting from tight supply, will face growing competition from areas such as Kowloon where rents are lower. Despite this, Hong Kong Island rents will remain well above the long-term average, by nearly 24%.
Melbourne and Sydney will see the largest rental growth in 2019 with rents rising 10.1% and 8.6% respectively. Both are experiencing tight supply in their office markets due to employment growth and relatively low levels of development completions in recent years. Prime rents have been rising rapidly in both markets, up by 13% in Sydney and 6% in Melbourne over the past year.
The Global Outlook Report found that while all cities are feeling the impact of slower economic growth and geo-political risks, some are benefiting from robust demand from tech firms for business space. This is coinciding with fewer major developments reaching completion, as the uncertain political environment has deterred some developers from building in recent years. This is squeezing supply and pushing up rents.