Hong Kong

Space Unit of Measure

Square Feet

Financial Data Below Reported In

USD

*
Typical Loss Factor from Rentable to Useable Square Feet

Loss Factor Notes:

*Efficiency dependent

Gross - 70%
Lettable - 80-90%
Net - 100%

Landlord Concessions

Fit-Out Concession

The Landlord typically does not provide a contribution or concession to fit-out as a part of the lease transaction.

Rent-Free Period

In addition to the fit-out contribution, the Landlord typically provides a contribution or concession in the form of a rent-free period.

Standard Range of Rent-Free Months

0.5mo.-2mo.

Typical number of rent-free months.

Rent-Free Period Notes:

Rent-Free period provision is the norm, very seldom do landlords provide capital allowances (if ever).

Lease Provisions

Lease Term

2yrs.-4yrs.

Typical lease term in years.

Lease Term Notes:

Typical lease term is 3 years.

Operating Expenses & Service Charges Included

Quoted market rent typically does not include operating expenses (service charges). There are additional charges that apply to leasing space.

Additional Charges

$0.38/sf-$2/sf

Estimated range for all additional charges per Square Feet.

Additional Charges:

Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other

Service Charge Notes:

Additional charges are quoted per square foot, based on the tenants leased space, for the property management fee for the common area of the building.

Services Charges/Management Fees often including Air Conditioning during office hours. Rates are an additional expense - 5% of the face rent paid quarterly. Based on consumption basis.

Lease Timeline: The following apply to both office and industrial leases.

Lease Execution Requirements:

Typical upfront requirements
None for strong credit tenants
Upfront rental payment
Security deposit
Corporate guarantee
Not Applicable

Requirements Notes:

Deposit and initial payment - deposit amount varies on covenant strength

Negotiated Subletting/Assignment

Typically, the tenant's right to sublease or assign the space is negotiated in the lease agreement.
Landlord Consent: Typically, the landlord's written consent IS still required.

Negotiated Subletting/Assignment Notes:

Dependent on landlord and occupier size

Statutory Subletting/Assignment

This is NOT a statutory right.
Landlord Consent: The Landlord's consent is still required.

Blend & Extend Strategies

Typically, a tenant can take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.

Statutory Early Termination

This is NOT a statutory termination right.

Negotiated Early Termination

It is NOT typical for tenants to be able to negotiate an early termination right in the lease agreement.

Early Termination Notes:

At landlord's discretion, but no given right in the lease

Workplace

Regional Office Space

100sf-120sf

Typical Square Feet per employee (includes office square footage for employees and contractors).

Regional HQ Office Space

140sf-180sf

Typical Square Feet per employee (includes office square footage for employees and contractors).

Hong Kong market is behind.

Desk Sharing

Desk-sharing is not a common practice in the market.

Urbanization of the workforce is: Not much of a trend in this market

Landlord Concessions

Fit-Out Concession

The Landlord typically does not provide a contribution or concession to fit-out as a part of the lease transaction.

Rent-Free Period

In addition to the fit-out contribution, the Landlord typically provides a contribution or concession in the form of a rent-free period.

Standard Range of Rent-Free Months

1mo.-2mo.

Typical number of rent-free months.

Lease Provisions

Lease Term

2yrs.-3yrs.

Typical lease term in years.

Operating Expenses & Service Charges Included

Quoted market rent typically does not include operating expenses (service charges). There are additional charges that apply to leasing space.

Additional Charges

$0.25/sf-$0.51/sf

Estimated range in total for all additional charges per Square Feet.

Additional Charges:

Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other

Service Charge Notes:

Additional charges are quoted per square foot, based on the tenants leased space, for the property management fee for the common area of the building.

Lease Timeline: The following apply to both office and industrial leases.

Lease Execution Requirements:

Typical upfront requirements
None for strong credit tenants
Upfront rental payment
Security deposit
Corporate guarantee
Not Applicable

Requirements Notes:

Deposit and initial payment - deposit amount varies on covenant strength

Negotiated Subletting/Assignment

Typically, the tenant's right to sublease or assign the space is negotiated in the lease agreement.
Landlord Consent: Typically, the landlord's written consent IS still required.

Negotiated Subletting/Assignment Notes:

Dependent on landlord and occupier size

Statutory Subletting/Assignment

This is NOT a statutory right.
Landlord Consent: The Landlord's consent is still required.

Blend & Extend Strategies

Typically, a tenant can take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.

Statutory Early Termination

This is NOT a statutory termination right.

Negotiated Early Termination

It is NOT typical for tenants to be able to negotiate an early termination right in the lease agreement.

Early Termination Notes:

At landlord's discretion, but no given right in the lease

Section 1. Fit Cost Data

Value-Added Opportunities:

No commodity-based value adds

Total Fit-Out Cost

$175/sf

Class A Office

$100/sf

Class B Office

$90/sf

Flex Office / Warehouse

$70/sf

Flex Office / Warehouse

Furniture Cost

$10/sf-$14/sf

Class A Office

$8/sf-$10/sf

Class B Office

$6/sf-$8/sf

Flex Office / Warehouse

$5/sf-$6/sf

Warehouse

Furniture Cost Notes:

Furniture costs are included in the Total Fit-Out costs

Low Voltage Cabling Cost

$6/sf-$8/sf

Class A Office

$3/sf-$4/sf

Class B Office

$2/sf-$3/sf

Flex Office / Warehouse

$2/sf

Warehouse

Low Voltage Cabling Cost Notes:

Low Voltage Cabling costs are included in the Total Fit-Out costs

Construction to Move-in Cycle Time

8wks-14wks

Class A Office

7wks-12wks

Class B Office

6wks-9wks

Flex Office / Warehouse

6wks-9wks

Flex Office / Warehouse

Section 2. Scope of Work Description

Phase 1: Services Before and During the Transaction

Review the LOI and work letter portion of the Lease to ensure that the clients interests are protected during the build-out of the project.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Advise Colliers broker and client on project issues and their resolution as they occur.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Participate in building tours, if requested, to evaluate building systems and other cost-related observations and prepare a building due diligence report
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Develop high-level project estimate and timeline based on test fit and Client standards
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Schedule and chair Schematic Drawings and Design Development Drawings review meetings/conference calls
Not typically included at all, but available for an additional fee.
Phase 1 Notes:
Services before and during the transaction are on a case-by-case basis, depending on a number of variables

Phase 2: Service Before and During the Design Process

Develop preliminary project budget and schedule.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Develop the RFP for selection of a space planner/architect and any other consultants identified and required
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Analyze, compare and evaluate responses to the RFP.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Orchestrate the space planner/architect interview process.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Negotiate, on behalf of the client, professional services agreements with the space planner/architect and other consultants.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Review architect’s final Program of Requirements.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor the design team’s schedule of deadlines and deliverables. Coordinate meetings with the design team and the client. Manage the design process on behalf of the client.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Review and recommend payment of the invoices for services. Submit invoices for payment to landlord or client and prepare monthly reports of project costs versus project budget.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Negotiate all client-vendor contractors (IT, AV, Security/Access Control, Signage, High Density Filing) on behalf of client.
Not typically included at all, but available for an additional fee.
Coordinate with either Architect or General Contractor in permitting process
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Schedule and chair weekly design review meetings/conference calls
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Other Value-Add Services: Test fits (including Look & Feel) - Cost Estimates - Schedule/timing/phasing scenarios - Floor plan, core and circulation efficiency ratios(GIA vs NIA) (NOA vs NIA) - Technical due diligence/Assessments - We may pack everything into a Feasibility Study or proposed them separately depending on the situation.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Phase 2 Notes:
Other value-added services exclude: Floor plan, core and circulation efficiency ratios, Technical DD, Feasibility Studies, which would come at an additional cost.

Phase 3: Services Before Construction

Liaise with the Landlord’s Representative.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Prequalify a list of general contractors to be interviewed (consult lease to confirm any Landlord required GCs).
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Develop the RFP, including Landlord and/or Lease required documents, for selection of a general contractor.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Analyze, level, and evaluate the responses to RFP.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Orchestrate general contractor interview process and prepare evaluation scorecard.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Review all proposed subcontractors and monitor the general contractor’s subcontractor bid process to ensure integrity of the process and quality of the workmanship.
Not typically included at all, but available for an additional fee.
Monitor the general contractor’s schedule of deadlines and deliverables. Coordinate meetings between the design team, general contractor, client and appropriate vendors.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Negotiate, on client's behalf, the General Contractor agreement for Client approval
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Schedule and coordinate Architect's 90% Construction Drawings review
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Develop Project Cost Summary + Invoice Tracker and update weekly
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.

Phase 4: Services During Construction

Coordinate with the Landlord’s Representative.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Conduct weekly construction meetings to assess progress, quality and conformance with the Contract Documents and distribute minutes of meetings.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor the general contractor’s schedule.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor the construction budget.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Review, and recommend for payment, the contractor’s Applications for Payment.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Monitor all project documentation.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Act at all times as client’s liaison to vendors contracted directly by Client (IT, AV, Security/Access Control, Signage).
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Oversee the punch list process to ensure acceptable completion of all items.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Close out all consultant, contractor and vendor contracts.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Submit General Contractor, vendor, and consultant invoices to Landlord for reimbursement per the Lease Workletter
Not available / not a service that can be offered.
Review and recommend for payment all General Contractor, vendor, and consultant invoices; submit to Client for approval
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Deliver close-out documents, as specified in the Lease, to Client
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.
Coordinate value/engineering process, if required.
Typically included in "Project Management" scope of work.
Typically included in “Design/Build” scope of work.

Additional Services: Services During Relocation

Develop RFP for moving companies, evaluate responses and recommend selection of moving company or identify, interview and review proposal for services from relocation consultants.
Not typically included at all, but available for an additional fee.
Represent Client in development of move strategy.
Not typically included at all, but available for an additional fee.
Monitor development of move activity checklist.
Not typically included at all, but available for an additional fee.
Represent client on site during move process.
Not typically included at all, but available for an additional fee.

Additional Services: Project Management Services Related to Furniture/Workstation Procurement

Conduct bid process for all furniture (workstations, case goods, seating, filing) purchases specified by the architect and/or client.
Not typically included at all, but available for an additional fee.
Conduct bid process for refurbishment of existing furniture and/or workstations.
Not typically included at all, but available for an additional fee.
Evaluate bids and negotiate purchase order with manufacturer(s).
Not typically included at all, but available for an additional fee.
Negotiate national buying contract with select furniture dealerships, using Colliers International purchasing power
Not typically included at all, but available for an additional fee.

Business Climate Business Climate data provided in partnership with Hickey & Associates. Rankings reported on a scale of 1 (least favorable) to 10 (most favorable). Please refer to the full report Explore 2017 for additional details.

Incentives and Labor Market

4, 6 4/10

Incentives
Value potential, diversity/number of programs

3, 7 3/10

Job Saturation
Competition for workers

2, 8 2/10

Wage Inflation
Rise in wages (past 10 years, local currency)

Educational Attainment

5, 5 5/10

HS Ed Eq
Proportion of population attaining this level

4, 6 4/10

University Ed
Proportion of population attaining this level

5, 5 5/10

Overall
Composite average of HS Ed Eq & University

Composite

4, 6 4/10

Additive sum of incentives, saturation, overall ed attainment, and wage inflation

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