|Author:||Lam, Ka-keung Henry|
|Title:||Assessment of Grade A office market in the Hong Kong decentralized district versus central business district in terms of vacancy and rental|
|Subject:||Offices -- Location -- China -- Hong Kong|
Rent -- China -- Hong Kong
Hong Kong Polytechnic University -- Dissertations
Department of Building and Real Estate
|Pages:||xv, 165 leaves : ill., maps ; 30 cm|
|Abstract:||Office decentralization has been developing rapidly in Hong Kong since the early 1980s. In the Year 1995, the total Grade A office stock in the Hong Kong Decentralized District firstly exceeded the Central Business District, office tenants relocated their business space to the Decentralized District in taking benefits of lower rent, flexibility on the floor-plate area and the betterment of supporting facilities. Despite the Grade A office in Central Business District deserved certain market niches for the favorable image and the advantages of clustering effect with professional firms or financial institutes, the emergence of Decentralized District and the continual expansion of that form suggested the future role of Central Business District might be diminishing. By examining the Suburban Attraction Index and Suburban Attraction Limit formulated by Brueggeman (1995), this study has analyzed the vacancy trend of Grade A office market in the Hong Kong Decentralized District versus Central Business District. During the market boom, the Grade A office market in Hong Kong Decentralized District has outperformed the Central Business District in term of the improvement in vacancy rate. To take a further step from the study of Brueggeman (1995), this dissertation has also examined the vacancy trends during the market downturn. The results found that the Decentralized District suffered deeper than that of the Central Business District when the vacancy was increased in the Overall District, i.e. the vacancy rate therein Decentralized District has been increased at a greater rate than that of Central Business District during the market slump. Correlation tests have been carried out among the parameters of supply factor, Gross Domestic Product and the employment rate (Services Sector) against the vacancy and rental rates. Significant correlation were demonstrated in (1) the Year-on-Year percentage change of Grade A office vacancy and supply in Decentralized District; (2) the Year-on-Year percentage change of Grade A office vacancy and supply in Central Business District; and (3) the Year-on-Year percentage change of JLW Office Rental Index in Wanchai/Causeway Bay and Central. However, no crucial correlation was observed between the vacancy rate and rental rate. The expected coming oversupply of Grade A office in both of the Decentralized District and the Central Business District might lead to the upsurging of vacancy rates. If the resembling conditions recurred as in the historical figures, the vacancy level in the Decentralized District would be dampen greater than that of the Central Business District. In addition to the quantitative analysis carried out above, interviews have been conducted to procure the qualitative comments from the office users' perspective.|
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