Medical, sports and wellness sectors to become the new growth drivers of the post-pandemic leasing market
Overall Grade A office rental level in Q2 2022 fell by 0.8% q-o-q, slightly less than the 0.9% q-o-q drop seen in Q1, with a 2022 full-year decline now predicted at 2% to 3%
Increased demand from the healthcare and medical aesthetics sector, together with serviced offices and co-working space operators, is now expected to be new drivers of office absorption.
Despite the overall retail market remaining weak, vacancy rates have lowered while rental decline narrowed compared to last quarter.
Rent for F&B outlets is expected to rise by 1% to 5% in 2H 2022, offsetting the decline from January to June. Overall F&B rental level for 2022 is expected to remain stable.
HONG KONG SAR – Media OutReach – 7 July 2022 –Global real estate services firm Cushman & Wakefield today published its Hong Kong Office and Retail Leasing Markets Review and Outlook Q2 2022 report. With the easing of the fifth wave of the pandemic since April, office market leasing activity has gradually recovered, and the retreat in Grade A office rent has moderated again, at 0.8% q-o-q. Mild negative absorption has been recorded, pushing availability slightly upwards. On the other hand, overall performance in the retail market has been relatively weak, with dampened total retail sales in the first five months of 2022. Overall rental levels in major retail districts have remained steady. The lifestyle products, sports and wellness sectors have grown amidst the pandemic period and emerged as new drivers in the domestic retail market. Consumer confidence is expected to recover gradually as a result of a new round of the Consumption Voucher Scheme, stimulating retail leasing activities in 2H.
Office market – Rental decline slowed, availability rose after three consecutive quarters of falls
Despite slow progress in the global and local economic recoveries, the leasing market was relatively active in Q2 2022. The overall office rental level decline further narrowed at 0.8% q-o-q (vs. 0.9% q-o-q in Q1) and has now fallen 1.7% in the year-to-date for the first half of 2022. By submarket, Hong Kong East and Kowloon West experienced steeper drops in rents at 1.6% q-o-q and 2.0% q-o-q respectively (Chart 1). Office rents in Hong Kong have now plunged by more than 27% from their peak in April 2019, standing at a relative bargain level, particularly in the core CBD areas predominately occupied by banking and financial institutions. Non-core areas have also continued to attract tenants with expansion and cost-saving opportunities. We now expect to see a rental reduction of 1% to 2% in the 2H 2022 period, while the recovery is expected to be led by the core CBD districts.
Given the previous three consecutive quarters (Q3 2021 to Q1 2022) of positive net absorption, this has demonstrated that tenants have taken advantage of bargain-level rents and proactively executed their leasing decision-making via relocation or upgrading.
Despite a good number of new leasing deals recorded in Q2, expired/ expiring leases in the quarter increased available space, pushing down total net absorption to -176,900 sq ft q-o-q (Chart 2). In terms of new leasing transactions by sector, the banking and finance sector took up the most floor area (29%), followed by professional services and real estate (17.5%) which notably outperformed with an increase of 7.6% percentage points q-o-q. The consumer products and manufacturing sectors have also been active (Chart 3). Overall, the Grade A office availability rate rose slightly by 0.2 percentage points q-o-q to 13.8%.
John Siu, Managing Director, Head of Project and Occupier Services, Hong Kong, Cushman & Wakefield stated, “Several large-scale office projects in non-core districts are expected to complete in H2 2022, providing a total floor area of 2.5 million sq ft to the Grade A office market. The upcoming supply will likely attract expansion, upgrading, relocation and cost-saving opportunities, prompting the decentralization trend to continue. In terms of new leasing activity, besides major movers such as banking and finance, and the professional services and real estate sectors, we have observed a sizeable number of new transactions conducted by the healthcare and medical aesthetics sector, which took 5.2% of the newly leased space in Q2. Serviced offices and co-working space operators have also continued to expand. We believe this new emerging demand will boost absorption of the new upcoming supply, while we expect overall availability to reach 16% to 17% by the end of this year.”
Retail market – Attractive rents as F&B operators are proactive in the leasing market
The city’s retail market remained relatively weak in Q2 2022, with total retail sales for January to May falling by 2.9% y-o-y. On a y-o-y basis, the Fashion & Accessories and Jewellery & Watches sectors recorded the steepest falls, while daily necessities such as Medicines & Cosmetics and Supermarkets sectors recorded increases (Chart 4). Nevertheless, the vacancy rate in core retail sub-markets fell or remained stable across the board. For example, Causeway Bay dropped to 7.9%, a return to the benchmark figure of the end of 2021, while Mongkok fell to 12.7% in Q2 from 16.4% in Q1.
With the pandemic gradually brought under control in the city, retail consumers have started to pick up in spending momentum” Retail rents in major districts have generally stabilized, with Central and Mongkok rising by 0.1% q-o-q and 0.6% q-o-q. In other districts, rental declines were minor, ranging between 0.2% q-o-q and 1.3% q-o-q. Benefitting from the further relaxation of dining restrictions, previously pressured F&B rents demonstrated promising signs of rental recovery in various submarkets, in a range of 0.6% q-o-q to 1.5% q-o-q (Chart 5), while rents in Central remained unchanged.
Kevin Lam, Executive Director, Head of Retail Services, Agency & Management, Hong Kong, Cushman & Wakefield stated, “F&B operators have been relatively proactive in expanding this quarter. With F&B rents remaining at attractive levels, coupled with the next round of the Consumption Voucher program soon to be issued, and new government leadership, F&B operators have turned more optimistic and have taken up space in high-end core districts to increase their brand exposure and positioning. We believe leasing activities will likely become more active, with some high street rents expected to reach between 3% to 5% growth, while we expect overall retail and F&B rents to rise by 1% to 5% in 2H 2022, offsetting the fall in the first half, and gradually entering a state of stability.
Kevin Lam added, “The effects of the pandemic have prompted people to prioritize their health and mental well-being. Travel restrictions such as the continuing quarantine controls have also shifted consumers’ spending habits towards domestic spending. In addition to the traditional retail and F&B sectors, the lifestyle products, wellness and sports sectorssuch as indoor climbing centers have continued to become a driving force and a anchor of the retail market as a result of their expansion and space requirements.”
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in over 400 offices and 60 countries. Across Greater China, 22 offices are servicing the local market. The company won four of the top awards in the Euromoney Survey 2017, 2018 and 2020 in the categories of Overall, Agency Letting/Sales, Valuation and Research in China. In 2021, the firm had revenue of $9.4 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.hk or follow us on LinkedIn ( https://www.linkedin.com/company/cushman-&-wakefield-greater-china).
Schneider Electric received top honors out of over 3,900 submissions from over 100 countries across various categories
The award affirms Schneider Electric’s efforts in providing outstanding solutions and services to help customers move towards net-zero world
HONG KONG SAR – Media OutReach – 7 July 2022 – Schneider Electric, the leader in the digital transformation of energy management and automation, today announced it has won the Energy & Sustainability 2022 Microsoft Partner of the Year Award. Schneider was honored among a global field of top Microsoft partners for its innovative EcoStruxure™ software solutions provided to customers that were powered by Microsoft technology, including Azure Cloud and Dynamics 365.
The Microsoft Partner of the Year Awards recognize Microsoft partners that have developed and delivered outstanding Microsoft-based applications, services and devices during the past year. Out of over 3,900 submissions from more than 100 countries across various categories, Schneider Electric was recognized for providing outstanding solutions and services in energy and sustainability.
In 2021, Schneider’s EcoStruxure solutions helped customers reduce their carbon emissions by 84 million tonnes which amount to 347 million tonnes saved or avoided since 2018. These solutions are powered by the most advanced evolution of Microsoft Azure, helping customers achieve their energy and sustainability objectives through the power of electric and digital solutions.
Olivier Blum, Executive Vice-President Energy Management at Schneider Electric, said “Receiving the 2022 Microsoft Energy & Sustainability Partner of the Year Award is a great recognition of the collaborative impact we are making together, to tackle climate change. We are at a critical juncture. Unless immediate action is taken to reduce emissions, we will shortly pass the point of no return. Companies are central to avoiding this; however, alone the impact will not be enough. That is why collaborations such as the one between Schneider and Microsoft are needed to supercharge innovation efforts and create the technology which can turn the tide.”
Customers Schneider Electric has empowered, together with Microsoft, by delivering outstanding solutions and services include:
Green Data Center: When Microsoft sought an end-to-end solution to design, build and operate their data centers more efficiently, Schneider leveraged MTWO, RIB’s flagship cloud construction platform to integrate all inputs into a federated model. This allowed Microsoft to create a digital twin that delivered project speed and causality within the construction phase, driving more efficiencies with less rework and reduced waste.
Leading ESG by example in its ecosystem, Schneider Electric leveraged digital and electric technology in its own buildings:
IntenCity: Opened in 2021, Schneider’s flagship ‘Building of the Future’ is ten times more energy efficient than an average property, making it one of the world’s most efficient buildings. Spanning 26,000m2 and housing 1,500 employees, Schneider’s EcoStruxure solutions with Azure deliver building intelligence by collecting 60,000 data points every two minutes. This allows IntenCity to use predictive data for smart building management and energy flexibility, for maximum reliability and resiliency.
Schneider Electric and Microsoft have been working together for more than 30 years. The longevity and success continue to be fueled by a shared vision for energy efficiency and sustainability. The ability to accelerate progress comes from the unique expertise that both Microsoft and Schneider can bring, but it is the collaboration that will take sustainability efforts the extra mile.
“I am honored to announce Schneider Electric as the 2022 Microsoft Energy & Sustainability Partner,” said Nick Parker, Corporate Vice President of Global Partner Solutions at Microsoft. “Schneider Electric were outstanding among the exceptional pool of nominees. We were extraordinarily impressed by the innovative use of Microsoft Cloud technologies as part of its EcoStruxure™ software solutions.”
Additional details on the 2022 awards are available HERE.
Schneider’s purpose is to empower all to make the most of our energy and resources, bridging progress and sustainability for all. We call this Life Is On.
Our mission is to be your digital partner for Sustainability and Efficiency.
We drive digital transformation by integrating world-leading process and energy technologies, end-point to cloud connecting products, controls, software and services, across the entire lifecycle, enabling integrated company management, for homes, buildings, data centers, infrastructure and industries.
We are the most local of global companies. We are advocates of open standards and partnership ecosystems that are passionate about our shared Meaningful Purpose, Inclusive and Empowered values.
HONG KONG SAR – Media OutReach – 7 July 2022 – Biologists from Hong Kong Baptist University (HKBU) have discovered in Hong Kong waters three new species of hard coral which have never been identified anywhere else in the world. The findings come shortly after their discovery of one new coral and two new nudibranch species, which was announced last year under their research project on coral health in Hong Kong.
Professor Qiu Jianwen (right) and Mr Yiu King-fung (left) introduce the new coral species.
The new marine species were identified by Professor Qiu Jianwen and MPhil student Mr Yiu King-fung of HKBU’s Department of Biology. The descriptions of the new corals have been accepted for publication in the academic journal Zoological Studies.
New species found during coral health research
About eight years ago, Professor Qiu and his team started a series of research projects related to coral health in Hong Kong, including studies on the impact of coral bioeroding sea urchins and coral-eating nudibranchs, as well as coral bleaching caused by global warming. A coral facility was set up at HKBU to culture corals and conduct controlled experiments to examine their physiological changes under different culture conditions. With continuous field surveys and in-depth research, the team has revealed the high diversity of sun corals in Hong Kong waters.
The three new sun coral species discovered this time were named by the HKBU team as Tubastraea dendroida, Tubastraea chloromura and Tubastraea violacea, and they all belong to the genus Tubastraea. The samples were collected when the team surveyed coral-eating nudibranchs at Sung Kong and Waglan Island in the eastern waters of Hong Kong. With the addition of three new members, the number of known species in the Tubastraea genus has increased from seven to ten.
The features of the three new sun coral species are as follows:
Tubastraea dendroida
Similar to most sun corals, Tubastraea dendroida has a typical bright orange colour, but its shape is rather unique. Instead of growing in clumps like most of its related species, this new specieshas a tree-like structure, with the main stem of its colony attenuating from the base to the tip. The HKBU team therefore named it “dendroida” to reflect its tree-shaped body.
Tubastraea violacea
Covered witha thin layer of pale purple tissue on the corallites (skeletal cups), Tubastraea violacea stands out from other related sun coral species as its polyp wall tissues and skeleton are violet in colour, and it has been named “violacea” accordingly. Nevertheless, its tentacles are yellow and the corallites have a thick wall. Based on comparisons with DNA sequences in public databases, the team found that this species may have colour variants elsewhere, such as a yellow colour variant in New Caledonia in the South Pacific.
Tubastraea chloromura
This coral has a delicate olive green skeletal wall and a circle of yellow tentacles surrounding its mouth. As a result, the species has been named “chloromura“, with “chloro” and “murus” meaning “green” and “wall”, respectively.
From coral gene sequences recorded in public databases, HKBU biologists envisage the potential distribution of Tubastraea dendroida and Tubastraea violacea in Japan and the Western Pacific Ocean. However, at this stage, Tubastraea chloromura is only known to inhabit Hong Kong waters.
All of these three coral species are non-reef-building corals. They do not host symbiotic algae that produce nutrients and energy via photosynthesis. Living in deeper waters at depths of between 10 and 30 metres, they gain energy and nutrients by capturing zooplankton from seawater using their tentacles.
New species discoveries suggest rich biodiversity
“Our discovery of three new species of Tubastraea enhances our knowledge of the diversity of this sun coral genus. Given that corals are one of the best-studied marine animals, our study reveals how little we know about marine diversity, and how many undescribed species are still awaiting our discovery,” said Professor Qiu.
Identification of the three new coral species comes less than a year after Professor Qiu and his team announced their last discovery in October 2021. While implementing a project supported by the Environment and Conservation Fund to assess the diversity and impact of coral-eating nudibranchs, the team discovered a new sun coral species in the genus Tubastraea and two new species of nudibranchs in the genus Phestilla in Hong Kong waters.
Looking back, the last time a new hard coral species was discovered and named in Hong Kong was about 20 years ago. “The discovery is very encouraging as it provides strong evidence of the high marine biodiversity in Hong Kong waters, and it helps fill in the knowledge gaps in biodiversity as advocated in the Government’s Biodiversity Strategy and Action Plan. It also inspires us to further explore the diversity of marine animals, study their functions and ecosystem services, and protect them from potential human disturbances,” Professor Qiu added.
Video: Please click here to download the video and footage.
Photos: 20220707_photo1 Professor Qiu Jianwen (right) and Mr Yiu King-fung (left) introduce the new coral species.
HONG KONG SAR – Media OutReach – 7 July 2022 – One Storage, a subsidiary of the Group listed on The Stock Exchange of Hong Kong since 1997, Soundwill Holdings Limited (stock code: 00878). One Storage has been providing excellent and professional mini-storage service (迷你倉) since 2018, which facilitates clients to fulfill their storage needs for life style and space.
Recently, One Storage expanded progressively in which the number of branches had grown to 32, covering the Island, Kowloon and New Territories. Handy and thoughtful storage services will thus be provided to more customers.
Coping with the market needs and consumption pattern under pandemic, One Storage has developed an AI App to boost service quality by providing the customers and staff much easier mini-storage management. The company has also integrated their database to allow customers to virtually visit branches and pay on the Internet, which saves their time.
Beside developing AI Apps technology, One Storage highly prioritizes the safety of customers and their properties. The storage facility is equipped with the design and fire safety devices that comply with the latest regulatory guidelines. Uninterruptible power supply is also available to prevent accidents from unstable supply of the building or district. Branches are also equipped with intelligent security system to enhance their privacy and security level.
One Storage provides a series of offers, including referral reward from existing customer and 40% off discount. Various payment methods including EPS, cheque, credit card, FPS and WeChat Pay are accepted. The company also provides exclusive interest-free installment, which allows our customers to free up their space by a few hundred dollars and enjoy a modern lifestyle.
The Managing Director of Electricité du Laos (EDL) has stated that the state-owned enterprise must undergo reforms to correct operations issues leading to continued losses.
Exclusive Ricoh-Cisco service hotline and team provide 24/7 support for digital transformation
HONG KONG SAR – Media OutReach – 7 July 2022 –Ricoh Hong Kong, a trusted workplace expert, is committed to providing a wide range of technology business solutions to enable companies to achieve a more effective digital workplace. Considering that remote/hybrid workplace have become modern trends and operating means, and in order to provide stable network connectivity and safe digital workplace, Ricoh has repositioned across Four Areas of Expertise. They include: Hybrid Workplace, Digital Workflow & Automation, Cloud & IT Infrastructure and Cybersecurity, with tailor-made solutions to assist companies to overcome digital difficulties. Ricoh and Cisco have established a strategic partnership since June 2022, introducing their “Secure Remote Access Solutions”, and thereby bringing more professional hybrid working and Internet of Things (IoT) support services.
Ricky Chong, Senior Director, Ricoh Hong Kong (left) and Andrew Wong, Head of Partner Organization, Cisco Hong Kong (right), believe the Ricoh-Cisco partnership will deliver the world-class smart office solutions and services to organizations in Hong Kong.
Ricoh X Cisco Meraki Secure Remote Access Solutions: Special service hotline providing all-round technical support
Ricoh and Cisco have already benefitted from synergy in their partnership in the Asia Pacific region. Now, given that hybrid working modes are resolutely popular in Hong Kong, Ricoh and Cisco Meraki’s Secure Remote Access Solution has combined network security and Auto VPN elements. Users need only to connect via relevant tools on the network, and then by calling the Ricoh Cisco special service hotline, Ricoh will complete the set-up through the Meraki cloud platform. This service provides automatic site-to-site VPN and enterprise-grade network security, which allows employees to use authorized computers, mobile devices, IP Phones, etc., to connect securely to the Internet and the company network. By using secure and smooth interconnectivity, workers will be able to feel as if they are very much “working from within their own company”, improving work efficiency across the hybrid work set-up, while minimizing workloads, to the relief of IT department.
Ricky Chong, Senior Director of Ricoh Hong Kong, responded, “In this global partnership program, Hong Kong is the first area in the Asia-Pacific region to benefit from this sustained effort in international partnership, providing users with the most comprehensive office network, IoT and IT management services. Technology can help companies to create smart workplace, saving an estimated average of 15% of office space required, but also improves employee working efficiency and creativity. Considering that remote and hybrid work modes are becoming prevalent in the post-pandemic era, being able to rely on a network connection out of office is an important issue. This partnership with Cisco combines basic network facilities and high-quality network services, and can offer more professional and highly-efficient IT support for different types of companies.”
Andrew Wong, Head of Partner Organization, Cisco Hong Kong, added, “Network connectivity is the most basic and important IT infrastructure requirement for any business operation. As more digital solutions, sensors, and artificial intelligence technologies are applied to various business activities, stable performance, flexible control and network security are the three most important points for companies. Cisco is very pleased to partner with Ricoh in the Hong Kong market to introduce Cisco Meraki’s Secure Remote Access Solutions, assisting companies of all sizes to implement hybrid working, and therefore meeting their requirements for unlocking the power and efficiencies of modern workstyle and smart workplace.”
With technology advancement, the connection between people online and offline is getting closer. Ricoh provides professional IT and network management services for companies through a strong IT service team and network management resources. Together with Cisco’s most high-end and secure network technology, the services will become a reliable partner for digital transformation, allowing companies to master a stable and secure network connectivity systems at any time.
Ricoh develops full range of digital services in Four Areas of Expertise, helping enterprises on their flexible DX journey
Ricoh’s comprehensive digital services offer the best collaborative technologies, enabling companies to collaborate effectively and get more out of their day, wherever they work.
Hybrid Workplace: Ricoh’s “Hybrid workplace” solutions fully support hybrid workforces, and feature Smart Pods, which are purpose-built meeting booths for workers, so no matter whether for in-office or remote office teams, workers are able to connect and collaborate seamlessly. Digital Services spans from planning, design and building, to offer software and hardware support to the workers, and to fully utilize the office space.
Digital Workflow & Automation: To improve company efficiency, Ricoh’s “Digital Workflow & Automation” solutions help to automate manual processes, allowing companies to focus on more valuable businesses, hence keeping workers engaged and productive. These solutions cover various areas, including Human Resources Management, Customer Relationship Management, Robotic Process Automation, and e-Signature & Approval, enhancing the client company’s competitiveness.
Cloud & IT Infrastructure: Under the philosophy of digital transformation, Ricoh’s “Cloud and IT Infrastructure” solutions make it easier for employees to access and use applications. Hybrid Cloud services provide higher reliability and security than traditional networks, allowing companies to store all critical and confidential data in the private cloud, while less commercially sensitive data is placed in the public cloud, thereby safeguarding company property and upholding cost-effectiveness.
Cybersecurity: As demand for hybrid working solutions increases, cybersecurity is an inevitable integrated consideration to ensure network performance, as well as for secure and reliable data access. Ricoh’s “Cyber Security Services” can protect organizations from the most imminent endpoint threats, such as phishing or malware (including impersonation and Business Email Compromise, (BEC)), and providing complete email protection. Ricoh’s one-stop Managed IT Services cover four areas: Monitoring, Maintenance, Support and Review, comprehensively maintaining the computer systems used by employees to ensure normal business operations. Its Security Operations Center even provides 24/7 security event monitoring, supported by a team of security specialists, who are working constantly to proactively identify and resolve any security issues which may arise through use of the business system.
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About Ricoh (Hong Kong) Limited
Established in 1963, Ricoh (Hong Kong) Co., ltd. focuses on digital services and office solutions. Entering the era of digital transformation, Ricoh’s Four Areas of Expertise includes Hybrid Workplace, Digital Workflow & Automation, Cloud & IT Infrastructure, and Cybersecurity. Ricoh has been actively advocating corporate evolution in recent years, accompanied by digital services and four customer values: Simplifying Complexity, Uncovering Hidden Opportunities, Overcoming Obstacles, and Embracing Diversity, bringing people and technology together, so companies can focus on forward.
www.cushmanwakefield.com.hk or follow us on LinkedIn (
https://www.linkedin.com/company/cushman-&-wakefield-greater-china). 
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