HONG KONG, August 21, 2024 – The vacancy rates of Grade A offices in Central and Hong Kong East improved in July, but office rents continue to fall slightly, according to JLL's latest Hong Kong Property Market Monitor released today.
The overall vacancy rate of Grade A offices rose to 13.7% as at the end of last month. But the vacancy rates in Central and Hong Kong East decreased to 12.0% and 13.1% respectively.
In contrast, the vacancy rate in Kowloon East saw an increase of 0.5 percentage points. The overall market also recorded a negative net absorption of 128,900 sq ft, primarily due to a large space in Kowloon East returning to the market.
Alex Barnes, Managing Director and Head of Office Leasing Advisory at JLL in Hong Kong, said: "The trend of flight-to-quality continues to drive the office leasing market, with office rents have dropped 36.5% from the market peak in 2019. It has reached a level that attracts upgrading demand, as more occupiers currently focus on high-quality space to upgrade their working environment,"
Notably, data analytics company Dun & Bradstreet leased a lettable floor area of 7,300 sq ft at Six Pacific Place in Wanchai, relocating from Kowloon East.
"In July, the overall net effective rent decreased by an additional 0.7% on a m-o-m basis. Central and Kowloon East saw further rent declines, dropping 0.8% and 0.6%, respectively. Rents also fell in the Wanchai / Causeway Bay and Hong Kong East submarkets, declining by 0.6% and 1.0%, respectively," said Cathie Chung, Senior Director of Research at JLL.
| Grade A Office Vacancy | ||||||
|---|---|---|---|---|---|---|
| Period | Overall | Central | Wanchai /Causeway Bay | Hong Kong East | Tsimshatsui | Kowloon East |
| End-July 24 | 13.7% | 12.0% | 10.0% | 13.1% | 9.3% | 18.8% |
| End-June 24 | 13.6% | 12.1% | 10.0% | 13.4% | 9.1% | 18.3% |
Source: JLL Research
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