‘Too little too late’: Hong Kong’s land sale halt may do little to ease office supply glut
Hong Kong's government has announced a 12-month halt on commercial land sales to address the oversupply of office space, but consultants believe this measure will have a limited impact. The moratorium is considered insufficient to counter the largest influx of newly completed office space in 17 years, with an estimated 3 million square feet expected to take 7-10 years to absorb.
Financial Secretary Paul Chan Mo-po stated the government may repurpose some commercial sites and offer greater land-use flexibility. However, experts emphasize that boosting demand through government support to attract businesses is crucial. The current Grade A office vacancy rate is 13.3%, with rents expected to decline further, potentially reaching 2012 levels. This could pressure landlords and lead to distressed asset sales, according to S&P Global Ratings.
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Hong Kong's government has announced a 12-month halt on commercial land sales to address the oversupply of office space, but consultants believe this measure will have a limited impact. The moratorium is considered insufficient to counter the largest influx of newly completed office space in 17 years, with an estimated 3 million square feet expected to take 7-10 years to absorb.
Financial Secretary Paul Chan Mo-po stated the government may repurpose some commercial sites and offer greater land-use flexibility. However, experts emphasize that boosting demand through government support to attract businesses is crucial. The current Grade A office vacancy rate is 13.3%, with rents expected to decline further, potentially reaching 2012 levels. This could pressure landlords and lead to distressed asset sales, according to S&P Global Ratings.
via SCMP Full Text Feed
