Grade A office market records negative net absorption in August

HONG KONG, 22 September 2022 – Hong Kong's Grade A office market recorded a negative net absorption of 29,200 sq ft in August due to weak leasing momentum, according to JLL's latest Hong Kong Property Market Monitor released today.

However, the overall vacancy rate remained flat at 9.6% at the end of August. Meanwhile, CICC leased a gross floor area of 47,500 sq ft at International Commerce Centre in West Kowloon for in-house expansion, marking one of the largest expansion cases so far this year.

The vacancy rate of Central's Grade A office market edged up to 8.4%, while Kowloon East's vacancy rate improved marginally to 12.5%.

Nelson Wong, Executive Director of Research at JLL, said: "Overall net effective rents dropped further by 0.3% m-o-m in August. Among the major office submarkets, rentals in Central and Wanchai / Causeway Bay dropped by 0.4% and 0.3%, respectively. But rents in Tsimshatsui rose by 0.1%. We believe the office rents will remain stable in the next few months."

Alex Barnes, Managing Director at JLL in Hong Kong, said: "Demand for office space in Hong Kong remains resilient, in particular the demand from PRC companies. Figures from JLL's Research department show about 12.1% of the new letting related to PRC firms in the first half of 2022, compared to 3.6% in the first half of 2021. We believe office leasing activities would improve if the local government removed quarantine completely to boost the economy."

^{Source: JLL Research}