Hong Kong Monthly February 2021

OFFICE

Banks to shrink existing office space and tap on flexible workspace Hong Kong Island Grade-A office leasing transactions during the month were mostly dominated by costsaving and downsizing deals. Rental levels in the CBD, such as Central and Admiralty, continued to contract amid the COVID-19 pandemic, so landlords in prime locations were more willing to offer rental discount to tenants. A new lease of 13,000 sq ft office space in 9 Queen’s Road Central by a Chinese Mainland charity foundation at about HK$60 per sq ft was recorded, which was about 15% lower than the rental level in Q1 2020.

Banking industry continued to review their real estate needs amid COVID-19. For instance, Standard Chartered gave up eight floors at Standard Chartered Bank Building in Central and three floors at Millennium City in Kwun Tong. The bank announced earlier that their staff will start using coworking spaces operated by IWG globally. Under the flexible work arrangements, more banks and corporates will cut their existing permanent office space, and rely even more heavily on flexible workspace. As a result, demand for flexible and agile workspace will increase.