The cost of renting office space in the Macau SAR is cheap when compared with the prices commanded by the market in a city like Hong Kong.
Speaking to Business Daily, Suzanne Watkinson, the Managing Director of real estate company Ambiente Macau Limited, explained that one of the reasons for the city remaining competitive in the sector owes to the fact that “global corporate clients” such as banks would rather establish headquarters in Hong Kong.
“Banks and lawyers usually lead the price up,” stated Watkinson. Hong Kong topped the list of the most expensive office rentals worldwide according to a report published last week by Knight Frank, a commercial property consultant based in the UK. Renting prime office space on the upper floors of a skyscraper in the neighbouring city costs on average of US$304 (HK$2,374/MOP2,446) per square foot monthly, according to the report.
In Macau, renting office space in an “A-grade property” may not cost more than HK$409 per square metre monthly, in addition to management fees, which vary from some HK$21.52 to HK$37.66 per square metre per month, according to Ms. Watkinson. The real estate expert noted that average prices for office units – normally calculated in square feet – range from some HK$237 per square metre (HK$22 sq. ft.) to HK$409 per square metre (HK$38 per sq. ft.) in the MSAR.
A-grade properties used for commercial purposes are for the most part located downtown, on the Macau Peninsula. Criteria for determining such types of property comprise quality of facilities, age of building, and provision of parking space, among other considerations. These would include buildings such as FBC, FIT, and AIA, which command some of the most expensive rental prices in the city, Watkinson points out. Other properties mentioned by the Ambiente MD include Circle Square and Macau Square, both in the vicinity of Senado Square. The square, Ms. Watkinson notes, “is not really A-grade, but very popular, and well located.” Rental prices for local commercial properties are still higher on average than the prices for residential property rentals. According to data provided by Centaline and Ricacorp Macau for September and published by Macau Business, the most expensive rent for residential was found in The Residencia Macau (HK$18 per sq. ft/HK$193.68 per sq. mt.), followed by the Star River and Windsor Arch (HK$16 per sq. ft/HK$172.16 per sq. mt.).
Commercial units, local offer
As at the end of December 2016, the total number of commercial units built in Macau amounted to 42,189, according to the latest data released by the Statistics and Census Services (DSEC).
Of these, 39,371 were located on the Macau Peninsula, with 2,289 in Taipa, and 529 in Coloane.
The number of vacant commercial units in the city stands at 4,742.
The total number of residential units amounted to 219,010 as at end-December.
Global cities, office rents
According to Knight Frank’s Global Cities: The 2018 Report, Hong Kong has been ‘attracting strong occupier demand from Mainland firms vying for top spots in the Hong Kong financial market.’
The consultant added that nearly all the new leases in the city during the first quarter of 2017 were for Mainland firms.
After Hong Kong, the second most expensive office space per month was in New York (Manhattan), at US$162 per square foot, followed by Tokyo, at US$140 per square foot.
In Mainland China, the most expensive prime office spaces were located in Shanghai (US$67 per square foot), ranking 8th worldwide, followed closely by Beijing (US$66 per square foot), ranking 10th worldwide.