Office market records negative net absorption for 5 consecutive months
Central’s new office lettings drop 31% m-o-m
HONG KONG, 23 January 2020 – The overall office market experienced negative net absorption of 91,000 sq ft in December last year as demand weakened amid the current economic uncertainties. This was the fifth consecutive month of negative net absorption recorded across the market, according to JLL’s latest Market Monitor released today.
In Central, the office market recorded net absorption of -16,100 sq ft last month with new lettings experiencing a 31% m-o-m drop.
However, some companies still sought to use this opportunity to expand. For instance, The Trade Desk, a digital advertising company, leased two floors with a total floor area of 28,900 sq ft at Hysan Place in Causeway Bay, to relocate and expand out of Wanchai.
The office market is becoming more tenant favourable. Rents in the overall market continued to decline, down 0.4% m-o-m last month, as vacancy in traditional core office submarkets continued to rise. Rents in Central fell by 0.3% during the month, with the vacancy rate rising to 3.6%, the highest level since February 2015.
Nelson Wong, Head of Research at JLL in Greater China and Hong Kong, said: “The office sales market remained muted as most vendors were unwilling to lower their asking prices to match the lower valuations expected from investors. Preliminary figures suggest that office transaction volumes dropped 56% y-o-y to HKD 33.6 billion in 2019.”
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