Hong Kong's Grade A office rents increased 30.5 percent for the first six months of 2005, CB Richard Ellis, one of the world's leading commercial real estate services firm said in HK Wednesday.

According to CB Richard Ellis, the office leasing market witnessed a strong performance in office expansion and relocation activity on the back of the continued high level of financial market activity in Hong Kong.

Grade A office rents and sales prices increased 30.5 percent and 26.4 percent, respectively, for the first six months of 2005. Vacancy rates in prime areas registered 6.2 percent in June, it said.

Shrinking availability has been witnessed in Core Central, Nigel Smith, executive director of the company said. The leasing response to AIG Tower, being the only new grade A office supply in Central in 2005, was robust in the second quarter.

"With the boosted demand and coming-up lease review activity in Central, it is expected that the Grade A office rentals will continue to rise." Nigel Smith said, " That in turn, will drive those financial companies which are keen on the agglomeration value that Core Central adds but seeking to push rentals down, to Admiralty on Central's periphery."

The company expected that rent and price will register respective increase of 15 percent and 5 percent in the remainder of the year.

Source: Xinhua