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HONG KONG, Oct 5 (Reuters) - Hong Kong's office rents will likely rise another 5 percent in the fourth quarter as vacancies fall further, with companies expanding on an improving economy, global real estate services firm DTZ DTZ.L said on Tuesday.
Hong Kong, a major financial hub in Asia, has seen office rents rising by 20 percent since the beginning of this year to hit HK$53 ($7) per sq ft per month in the third quarter, the London-based firm said.
"The economic situation in Hong Kong seems to be quite stable and companies now are looking towards expansion of space, more so than 18 months ago when there is a lot more contraction, so overall rents will move up," Mark Price, DTZ's head of business space for greater China, told a news conference.
Hong Kong's overall office vacancy will likely fall to 4.2 percent in the fourth quarter from 4.9 percent in the previous quarter, after factoring in a net absorption of around 600,000 sq ft in the final three months of 2010, DTZ executives said.
The office vacancy rate in Hong Kong, whose skyline is dotted by buildings such as the IFC and the Bank of China, has been falling since the first quarter of this year after hitting 8.2 percent in the final three months of 2009, DTZ said.
Hong Kong's economy, which relies on trade and financial services for growth, has been recovering since the fourth quarter of 2009, and the momentum extended in the first quarter this year when GDP rose a revised 8.0 percent from a year earlier.
In August, the Hong Kong government revised up its full-year GDP growth forecast to 5-6 percent in 2010, from the previous forecast of 4-5 percent. [ID:nTOE64D05O] [ID:nHKV002393] ($ = HK$7.8) (Reporting by Lee Chyen Yee and Joy Leung; Editing by Lincoln Feast) (See www.reutersrealestate.com for Reuters' global service for real estate professionals)