Hong Kong: The Worlds Most Expensive Rental Space
On November 2012 a significant shift took place in the world of office retail space when the Asian mega city of Hong Kong dethroned New York from its lofty perch as the city in possession of the most expensive retail space in the globe. New York held the numero uno position for more than a decade before the baton was passed on to the Oriental city.
Real estate experts reckon that a square foot of retail space in the prime shopping areas of Hong Kong can cost as much as $ 4,500 on an annual basis. The average market rate for one square feet of office space in the city is usually in the region of $2,500 to $3,000. Average rentals have shot up by 35% over the last year.
There are many reasons behind this slow but sure rise in office space rental costs in Hong Kong. Most of these high value retail spaces have been lapped up by global luxury brands of the likes of Sa Sa International Holdings Ltd, Salvatore Ferragamo Italia Spa, Chanel, Gucci, Christian Dior and Burberry. The demand for these designer brands is a key reason fuelling the rental boom since shoppers from all over the world flock to these stores in order to take complete advantage of the duty free prevalent in Hong Kong. Tourists from the Chinese mainland constitute a sizeable chunk of the shopper footfalls recorded by the city. Another important contributing factor behind the spurt in retail rental rates is the fact that Hong Kong faces an acute shortage of quality office space. This gross mismatch between demand and supply is not expected to be bridged any time soon implying that these astronomical rental rates will go up even further in the future.
Some of the most coveted spaces that command a premium in the shopping paradise are areas like Lockhart Road, Central and Tsim Sha Tsui districts, Times Square Mall and Causeway Bay.
However it must be noted that Hong Kong’s hold on the crown as the city possessing the most pricey office space in the world is tenuous at best. Media reports indicate that the erstwhile top gun New York can regain its preeminent position if rental charges on the elite Fifth Avenue area of the city continue to rise at present rates and the American economic recovery gathers further steam.