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Hong Kong Luxury Rents Reach 'Tipping Point'

Kelvin Wong Bloomberg.com 12/19/2011 20:41
Hong Kong Luxury Rents Reach 'Tipping Point' - Real Estate - Business - Property - Hong Kong

Hong Kong luxury home rents, which fell last quarter for the first time since mid-2009, may slump 10 percent next year as banks and hedge funds scale back amid the threat of a global recession, according to brokers including Jones Lang LaSalle Inc. (JLL) and Colliers International.

“We’re definitely at that tipping point,” said Anne-Marie Sage, Hong Kong-based head of residential leasing at Jones Lang, the world’s second-largest commercial brokerage. “We’ve began to see vacancies at the very top end of the market. The banking and the financial sector have basically stopped all movement.”

HSBC Holdings Plc (5) and Macquarie Group Ltd. are among banks shedding jobs in the city as investment and corporate finance activity slows. Rents of luxury homes -- those with at least 100 square meters (1,076 square feet) -- decreased 1.6 percent in the third quarter, after gaining almost 19 percent in 2010 and 5 percent in the first half, according to Jones Lang.