Grade A office rent bottoming out

A downward adjustment of 3% is forecast for the whole of 2012.

Colliers International reported:

In the wake of positive signs from the Central Grade A office market, the overall Grade A office rent is bottoming out. Although individual companies are reducing staff in light of a deteriorating business environment, there was no major headcount reduction.

Clouded by the uncertain economic outlook, Central / Admiralty rents are expected to stay flat for the rest of the year, taking into account the falling rent affordability of top-tier buildings and the rising vacancy rate.

However, the other submarkets should remain resilient and Tsim Sha Tsui is expected to outperform other submarkets due to high demand from relocation tenants coupled with limited stock available for lease in the district.

For the whole year of 2012, the overall Grade A office rent is projected to undergo only a mild downward adjustment of 3%.