In the early 2000s, the Hong Kong real estate market was suffering from overbuilding of office space at the same time as the Asian financial crisis was occurring, when there were huge outflows of funds from most Asian countries that brought near-depression conditions in the region. As a consequence, many companies failed, and some foreign companies left the region. The upshot was that there was a large amount of empty office space in Hong Kong.

In 2003, the market bottomed out, and the economies of Hong Kong and other countries in the region began to recover. The central business district in Hong Kong became a very desirable location for offices of global financial services companies, such as banks and hedge funds, among others. In fact, the central business district became so desirable that the average rent on office space rose from a low of about HK$20 per square foot in 2003 to more than HK$60 in 2006. By 2006, very little office space was available. Because of the earlier financial crisis and large amounts of vacant office space, virtually no new office building construction was started in central Hong Kong during this period. The supply of office buildings is fixed for a considerable time because of the time it takes to plan, finance, and build new large office buildings. 

Is there any evidence to suggest that economic rent was being earned by owners of Central Hong Kong commercial real estate? 

Yes. The short-run supply curve of real estate in this area of Hong Kong is perfectly inelastic. The increase in demand for office space has led to a rising price of office space. Economic rent arises when changes in demand and price have no effect on the quantity supplied.

What do you expect happened to economic rents in Central Hong Kong as the recession resulting from the global financial crisis that began in 2008 spread across the globe?