Supply of flexible workspaces likewise decreased.
Despite the surge in demand for flexible workspaces across APAC, Hong Kong saw lower-than-expected demand levels, decreasing to 8% in 2023, The Instant Group reported.
The traditional and flexible office sectors are converging, with flexible lease durations now 36% longer than pre-pandemic.
In Hong Kong, the average number of required desks is 5.1, whilst the supply of flexible workspaces has decreased by 0.4%, amounting to roughly 6 million sq ft.
In 2023, over 46% of desk placements in Hong Kong were for groups of 26 or more, up from 12% in 2019.
In response to market changes, traditional landlords offer 12-month leases, shorter than the usual two to three years pre-pandemic.
Rent-free periods are also longer at seven to eight months, up from one to three months previously. With current vacancy rates at 15%, up from 5-6% pre-Covid, landlords are increasing flexibility to fill spaces.
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