Central Plains Commercial Shops: It is expected that the Hong Kong commercial leasing market will stabilize and improve in May.

According to the latest statistics from Midland (Commercial and Commercial), in April, there were about 521 transactions in the Hong Kong commercial building rental market, a decrease of about 11.39% from the previous month, and an increase of about 11.8% from the same period last year. The total rented floor area was about 1.486 million square feet, a slight increase of 0.23% month-on-month and a significant increase of about 34% year-on-year. Midland (Commercial and Commercial) predicts that due to the holiday factor, the rental performance of Hong Kong commercial buildings has slowed down, but the overall transaction volume remains above 500 units. In addition, with the continued activity in IPOs and finance, the demand for leasing commercial buildings from enterprises remains strong. It is expected that the performance of commercial building leasing transactions in May will be stable and improve. Chen Yanlou, director of Midland (Commercial and Commercial) office department, stated that based on the latest data from Midland (Commercial and Commercial), due to the holiday factor, the commercial building market recorded about 521 rental transactions in April, a decrease of 11.39% from the previous month, and an increase of 11.8% year-on-year. The total rented floor area is about 1.486 million square feet, an increase of 0.23% month-on-month and 34% year-on-year. The most eye-catching rental transaction in the month was made by the Dutch quantitative trading company IMC Trading (IMC), which pre-rented 10th to 12th and 16th floors of Financial Street Holdings International Finance Center Phase 2 in Central, with a total area of about 18,350 square feet, at a rent of about HK$2.2 million per month. It is reported that the new tenant is expected to move in in July this year for a lease term of 3 years. IMC currently leases a commercial building in the same area at 100 Queen's Road Central, with a unit area of about 5,000 square feet. This relocation will significantly increase its office space by about 2.7 times. The property of International Finance Center Phase 2 is currently leased by Banco Santander from Spain, and the lease will expire in June. The rent for this unit reached about HK$180 per square foot during the peak period in 2019, and the new rental rate this time has been reduced by about 33% from the high level. Regarding the vacancy rate of grade A buildings, Chen Yanlou pointed out that the overall vacancy rate of grade A buildings on Hong Kong Island continues to improve, with a consecutive decrease for four months. In April, the overall vacancy rate was 11.40%, down 0.34 percentage points month-on-month, and a significant improvement of 2.20 percentage points year-on-year. Among them, the performance in core areas was outstanding, with vacancy rates of 6.06% and 10.96% in Central and Admiralty respectively, down by 0.27 and 0.42 percentage points month-on-month, and a significant improvement of 2.75 and 3.29 percentage points year-on-year respectively. As for the Kowloon area, the overall vacancy rate was 15.66%, a slight decrease of 0.1 percentage points month-on-month, and a significant improvement of 0.87 percentage points from the same period last year. The different districts show a polarized trend, with Tsim Sha Tsui district performing the best, with a vacancy rate of 6.29%, a decrease of 0.19 percentage points month-on-month, and an improvement of 1.57 percentage points year-on-year; while there is pressure in the supply-heavy East Kowloon district, with vacancy rates of 16.49% and 25.97% in Kwun Tong and Kowloon Bay respectively, a slight increase of 0.73 and 0.14 percentage points month-on-month, and an increase of 1.15 and 1.17 percentage points year-on-year respectively. Chen Yanlou stated that with the adjustment of rental rates of grade A buildings in core areas to a reasonable level, the demand for relocation and expansion of enterprises continues to emerge, leading to frequent large-scale leasing transactions in the market, which help support the performance of rental areas. It is expected that as the economy and financial industries gradually stabilize, the commercial building rental market in May will remain stable. Grade A commercial buildings in Hong Kong Island's core areas will have the advantage of location, resistance to decline, and trends that are more advantageous than emerging supply areas like East Kowloon, and the vacancy rate is expected to decrease.