According to the latest Greater China Property Market Report release by Knight Frank, Shanghai, Beijing and Guangzhou will have large amounts of prime office new supply this year, which will impose downward pressure on rental.
Prime office
In 2015, office rents in Shanghai, Beijing and Guangzhou will face downward pressure, due to large amounts of new supply. In Taipei, the vacancy rate could increase in the short term with abundant supply, but rents should continue to grow as new offices will be launched at higher rates.
In 2015, office rents in Hong Kong’s CBD are likely to stand firm or edge up by about 5%, mainly driven by the ongoing business expansion in Mainland China institutions. Looking at decentralized areas, rents will remain stable amid robust demand.
Luxury residential
With favourable policies, the Mainland luxury residential market is set to experience another wave of increases in both price and sales volume in 2015. With continuing cooling measures, Taipei’s luxury home prices would slightly decline in 2015. In Hong Kong, since the relaxation of the Double Stamp Duty in May last year, the transaction volume of luxury residential properties has rebounded. As the US may increase interest rates in 2015, luxury home prices are likely to remain stable or decline by up to 5% this year.
Prime retail
In 2015, a number of new shopping centres will open in Beijing, Shanghai and Guangzhou, imposing downward pressure on rents. With continuing interest from international retailers to enter Taipei, its retail rents and prices would further increase, as shortage of retail space will continue.
In view of Mainland tourists’ strong demand for daily necessities and mid-end products, a number of luxury brands began to restructure their retail store network. In the fourth quarter of 2014, prime retail rents in Hong Kong edged down slightly quarter on quarter and this downward trend is expected to continue in 2015.