A quarter of Hong Kong companies plan cuts in office space, up from 2023, says Colliers

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A weak economic recovery and geopolitical uncertainties have had more companies ‘talking about money’ when making rental decisions, the consultancy finds

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More businesses in Hong Kong are looking to downsize their office footprint this year, according to a new survey. Photo: Jonathan Wong

Eric Jiang

Published: 3:00pm, 30 Jun 2024

More than a quarter of Hong Kong companies want to reduce their office footprint this year amid macro uncertainties, but those in the insurance and legal services sectors are bucking the trend, according to a new survey by Colliers.

Of the 358 Hong Kong companies surveyed by the property consultancy, 27 per cent said they intended to downsize their office space, an increase of 6 percentage points from last year. Around 91 per cent said price is the top factor when making rental decisions.

“Challenging macroeconomic and geopolitical environments are causing businesses in Hong Kong to stay cautious about their business outlook,” said Fiona Ngan, head of occupier services at Colliers. “In general, they are seeking ways to streamline their operating costs, including re-evaluating their office rentals and use of office space.”

Some 67 per cent of the respondents cited cost as a reason for cutting office space, while 60 per cent were concerned about shrinking business demand, Colliers found.

The logistics and shipping sector had the highest share of respondents cutting their office space because of a weak outlook, followed by the technology, media and telecommunications industry, according to the report.

The high vacancy rate has led to a decline in rents, according to Ivan Wong, senior director at Colliers. “We see double-digit-level vacancy rates in major districts in Hong Kong, where the landlords have to offer special packages for companies.”