Conversely, Hong Kong office vacancy rates improve in July
According to JLL’s latest Hong Kong Property Market Monitor report, vacancy rates of Grade A offices in Central and Hong Kong East improved in July 2024, but office rents continue to slip.
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 having 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 month-over-month 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.
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