Expanded Tax Reforms to Drive Demand for Core District Office Buildings: Ma Tai-young
On.cc · 1 SOURCESabout 2 hours ago2 MIN
Summary
Midori Group and Midland Commercial & Industrial Property CEO Ma Tai-young has highlighted that the Hong Kong government's consideration to expand tax incentive schemes for the financial and investment sectors could significantly boost demand for core district office buildings. If proprietary trading firms are included in the carried interest and performance compensation tax relief framework, it would create stronger incentives for companies to establish or expand their teams in Hong Kong, driving demand for Grade A office spaces in prime commercial areas.
Key Points
- The government is reportedly reviewing the expansion of tax benefits to include proprietary trading firms under carried interest and performance compensation tax exemptions
- Office registration volume is expected to reach 1,225 deals for the full year, representing approximately 10 percent year-on-year growth
- Financial institutions prefer Grade A offices with prime locations, convenient transportation, and flexible floor layouts, with Central leading the benefits
- During the first seven months, office registrations totaled 754 deals, up 15.6 percent year-on-year, with registration amounts reaching approximately HK$15.56 billion, rising 6.1 percent
- Central and Sheung Wan recorded 109 deals in the first seven months, a 33 percent increase year-on-year and the highest in five years, with registration amounts of approximately HK$5.1 billion
- Causeway Bay recorded 81 deals, up 17.4 percent year-on-year and the highest in four years, involving nearly HK$1.9 billion
- Current vacancy rate for Grade A offices has fallen below 9 percent, with the rent index rising month-on-month
- High-paid financial talent inflow will increase demand for high-end rental housing in core districts and areas with convenient transportation
Why It Matters
The expansion of tax incentives could accelerate the absorption of vacant office space in Hong Kong's core commercial districts, particularly in Central and Hong Kong Island areas, strengthening Hong Kong's position as a regional financial hub. Additionally, as financial professionals transition from renting to buying, the luxury residential market—including large-format homes—stands to gain sustained support in both transactions and rental rates, creating a positive spillover effect across the property sector .
The expansion of tax incentives could accelerate the absorption of vacant office space in Hong Kong's core commercial districts, particularly in Central and Hong Kong Island areas, strengthening Hong Kong's position as a regional financial hub. Additionally, as financial professionals transition from renting to buying, the luxury residential market—including large-format homes—stands to gain sustained support in both transactions and rental rates, creating a positive spillover effect across the property sector .