3 reasons to believe Grade A office market is poised for a rebound in 2013

Rents have fallen 2.3% in 4Q12.

Colliers international reports that the overall net take-up increased from 111,000 sq ft in 3Q 2012 to 372,000 sq ft in 4Q 2012. Regardless of increasing take-up, overall grade a office rents however saw a downward correction of 2.3%  in 4Q 2012. 

Colliers believe though that  the improved business conditions will encourage business expansion plans, thereby supporting the office leasing demand. "The overall grade a office rent is set to rebound in 2013."

Here are the 3 key reasons for optimism: 

1. Pmi signals improvement in business conditions

The hSBC hong kong Purchasing managers’ Index increased from 50.5 in november 2012 to  52.2 in December 2012, signalling a further improvement in hong kong’s business conditions.  

2. More optimistic hiring expectations

According to a quarterly survey conducted by hudson, employers in hong kong became more  optimistic, with 40% of executives interviewed in the poll planning to increase their headcounts  in 4Q 2012, versus 38% in 3Q 2012. more than half of the employers (55%) intended to keep  headcount steady. meanwhile, employers intending to decrease headcount dropped to 5%, which  is the lowest intention across all countries surveyed in asia Pacific.
slower contraction of job vacancies in “fire” sector the latest figures from the Census and Statistics Department indicated slower contraction in the  Finance, Insurance and real Estate (FIrE) sector’s job vacancies, from negative 9.3% YoY in 2Q  2012 to negative 4.2% YoY in 3Q 2012. Correspondingly, the overall grade a office rent is set to  pick up in 2013 

3.Slower contraction of job vacancies in “fire” sector

The latest figures from the Census and Statistics Department indicated slower contraction in the Finance, Insurance and real Estate (FIrE) sector’s job vacancies, from negative 9.3% YoY in 2Q  2012 to negative 4.2% YoY in 3Q 2012. Correspondingly, the overall grade a office rent is set to  pick up in 2013.