Stamp duty hike sees office sales slump in hong kong

The firm’s latest report shows that transactions in the commercial property market fell from 412 in February to 78 in April. This dramatic dip, which is recorded in the second quarter of 2013, has been attributed to the recent doubling of Stamp Duty on the purchase of both residential and commercial real estate.

Indeed, Hong Kong doubled the sales tax on residential property costing more than HK$2 million ($258,000) and targeted commercial real estate in Q1 2013 as the state continues to try and prevent a housing bubble. Sales figures are expected to remain low in the coming months.

The report also showed the majority of transactions continue to involve mainly relocations and renewals.

“With tenants continuing to take cost-cutting measures, spaces with monthly rents of between HK$40 and HK$60 per sq ft were in high demand for relocation purposes. As such, leasing activity was the most active at 28 Hennessey Road and Hysan Place in Causeway Bay and One Island East in Quarry Bay,” commented Knight Frank Research.

“Major leasing transactions in June included a 17,520 sq ft space at United Centre in Admiralty and a 10,231 sq ft in Millennium Tower in Kwun Tong. Grade-A office rents in major business districts remained stable in June.

“Central’s Grade-A office rents remained virtually unchanged in June and we believe they will remain largely stable in 2013.”