The commercial real estate office situation in Hong Kong's Central district soured during the first half of 2012, according to a report from Jones Lang LaSalle.
Office rents in the district declined 7 percent when compared to the same point in 2011, which is mostly made up of banking and finance companies. In total, 56 percent of all Class A office properties in Hong Kong are one of those types, The Standard reported, citing the report.
"Offices are relocating out of Central due to the lack of suitable space, hike in rents, technological advancements and infrastructure improvements," said Marcos Chan, national director and head of research at Jones Lang LaSalle. "A major driving force for office demand will be the development of Hong Kong as an offshore yuan market."
Central has a total demand for another 6 million square feet of office space in the next eight years, but it can only create another 3.5 million in the next 10 years, the report added. However, the Kowloon East region was a bright spot for Hong Kong, as it experienced an increase year-over-year, and may be able to eclipse 54 million square feet of space by 2020.