The COVID-19 outbreak brought Grade A office leasing activity to a near standstill in Q1 2020 amid widespread delays to site inspections and decision-making.
Gross leasing activity declined by 31% q-o-q to the weakest quarterly total since Q1 2014.
Despite overall weak market sentiment, the quarter did see some movements of several PRC firms on Hong Kong Island, some of which had been under negotiation for some time.
Large transactions were limited in Kowloon and The New Territories. However, the insurance sector continued to display steady demand, with Manulife adding to its footprint in Kowloon East by committing to a 36,200 sq. ft. floor in The Quayside.
Corporates - especially multinationals – will remain cautious towards business expansion and hence their real estate requirements for the duration of the COVID-19 outbreak, which appears likely to last well into Q2 2020.
Measures by companies permitting staff to work from home and/or on a flexible schedule may prompt some firms to conduct long-term reviews of their office requirements and locational strategy as a cost-saving measure.