A study on Hong Kong office market development trends and investment strategies during the market transition period from the perspective of developers

Abstract

As an international financial hub, Hong Kong has attracted numerous multi-national corporations (MNCs) and Chinese corporations to set up office in the city. The office market in Hong Kong has remained in a peak for decades where market demand was sufficient, especially in core business districts like Central. Yet, the trend of office decentralization was formulated in recent decades, and new trends have been emerging. A lot of studies and research addressed these issues especially when the trend of office decentralization was first spotted. Yet, as there was an outbreak of COVID – 19 in 2019, the office market nature altered. A lot of new working arrangements including the “Work from Home Mode” and “Hybrid Mode” were introduced. With the changed market nature and mode of working, new office trends and office development strategies have to be identified, analyzed and developed. This study aims to analyze future office market trends and provide possible office development strategies in developers’ perspective. A literature review was conducted to look for traditional office development mode, market trends and strategies for analysis. Information regarding new modes of working, the impacts brought by COVID – 19 on the office market were also gathered. The reasons of office decentralization and the development of sub-urban areas were then identified. By adopting qualitative research method – interview, the up-to-date market information and opinion from developers, real estate professionals, and office tenants were collected. With the aid of the research done in the literature review chapter and the interview findings, the research objectives were addressed accordingly. The office market uncertainty-induced issues, tenants demand on office building provisions, office space landscape changed-base issues were discussed with the available information. This study addressed the issues with specific or a combination of development strategies. Favorable office development locations, office development strategies during economic downturn, modern smart technologies and amenities provisions, and flexible mixed-use development model were introduced. These knowledge and models could assist developers when considering developing office buildings and complex in post-pandemic era.