With the continuation of the China-US trade war, economic uncertainty featured prominently in early 2019. Despite concerns, the low vacancy rate environment carried over from 2018, leading to a slight increase in the CBD’s rental rate.
Decentralisation was still the main focus for MNCs, which resulted in steady rental growth in submarkets on Hong Kong Island, particularly Island East. Kowloon East saw a number of new completions which provided additional options for corporations pursuing a departure from traditional core districts..
In the midst of the China-US trade war and looming economic uncertainty. Hong Kong businesses were also affected by a number of social movements, with the local unrest forcing businesses to take precautionary measures by cutting costs and identifying contingency plans.
Consolidations from MNCs and flexible workspace operators affected vacancy rates, particularly Kowloon East where the majority of tenants are in the trading sector. With weak demand across all market sectors, office rental rates were pressured into negative territory in the last quarter of 2019.