Rents at Central drop in 2012

Less expensive locations take business away from Central, the world’s most expensive place to lease office space.

CBRE Group Inc. said average rental prices in Central fell some 12% last year as banks shed employees and moved to cheaper locations due to weaker corporate finances.

Property broker Colliers International based in Seattle said the average rent for prime offices in Central was about HK$98.80 a square foot a month at the end of the third quarter.

Rents in Central are expected to continue falling in the first half of 2013, said CBRE and Jones Lang LaSalle Inc. of Chicago. Last year, some Central landlords lowered rents by as much as 30% to attract tenants.

Central’s grade-A vacancy rate rose to 5.5% in the third quarter from 3.5% a year earlier, according to Colliers.

Despite the rent drop, space in buildings with large floor plans of more than 20,000 square feet, a feature favored by global investment banks, remains in short supply in the city, property brokers said.