The office property market in Hong Kong is thriving after the 1997 Asia Financial Crisis.

Among the thirteen asian cities, Hong Kong reaches the highest level of rent, its rent which increases 44.8% compared with the earlier year. Its capital value comes second, up by 15.25%; and ranked as the forth among asian cities, its vacant rate in June reaches 6.6%. The economists predict that the economic growth rate in Asia region has 4% in 2001 and thus becomes the fastest growing region.

Tim Bob Man, director of the North Asia Region reseach consultant deparment of XXX, pointed out that as the rental level in the Asian Region rose stronger than its capital value, its investment return rate appeared very attractive, in particular the one for the office property. Since this, coporate investors try to identify those which have a higher investment return, although they have seldom invested in the property market.

Due to the active rental transaction, a majority of Asia countries in general have a low vacancy rate in the third quarter of this year. High technology companies help boost up the demand for offices in several cities such as Shanghai, Peking and Singapore, in particular the centres of Po Sei and Po Tung in Shanghai. Hong Kong's vacancy rate, 6.6%, is ranked as the forth, coming after Tokyo, Sidney and Singapore.

Thanks to the increase in market demand and the decline in vacancy rates starting from this year, rental levels in the majority of Asian cities are increasing in the third quarter and even stronger than the last quarter.

However the level of capital value varies in different countries. In the third quarter, the main commerial centres of XXX, Sidney and Singapore have a higher level of capital value than the last quarter. For the main commerial centres of XXX, Po Sei and Mankok, their capital value levels keep stable. In contrast, the main commerial centres in Philiphine and New Zealands have a declining rate of capital value.

According to the Centraline's Commerial department, 78 transactions of the rental offices in the Island's central area are recorded, but down by 17, compared with the last month. The total rental area in November falls by 23.86% from the last month to 1705400 square feet. Besides, the rental sitation of the island's non-central areas keeps stable. Its November transaction is 172, slightly decreasing by 5, compared with 177 transactions last month.

XXXproperty pointed out in its latest report that transactions of the Island's Class A Offices falled 33% from 205 last year to 132 this year. In terms of the total floor area, the transaction increased by 60% from 1,400,945 square feet last year to 1,034,691 square feet this year.

The article is translated from the original one published in Hong Kong Economic Journal