News release

Office market records positive net absorption for three consecutive months

Net effective rents grew 0.2% m-o-m in December

January 19, 2022

HONG KONG, 19 January 2022 – Positive net absorption was recorded in the overall Grade A office market for the third consecutive month, at 9,100 sq ft in December, according to JLL's latest Hong Kong Property Market Monitor released today.

The office leasing market saw less activity towards the end of 2021, but the overall Grade A office market recorded a positive net absorption for three consecutive months as occupier demand for premium office space continued to improve.

The overall vacancy rate stood at 9.6% as of the end of 2021. The vacancy rate in Central rose to 8%, while Kowloon East registered the highest vacancy rate among major office submarkets at 13.3%.

Alex Barnes, Head of Agency Leasing at JLL in Hong Kong, said: "Overall net effective rents of Grade A office grew 0.2% m-o-m in December. 2022 will see the vacancy rate tick higher on the back of about five million sq ft of new office supply slated for completion. We expect that overall office rents will buck this addition of new supply and rise 0-5% this year with improving business sentiment."

On the industrial sector, Nelson Wong, Head of Research at JLL in Greater China, said: "Driven by robust domestic consumption, the industrial leasing market welcomed numerous commitments by logistics players, mainly on renewals with one notable new letting. The industrial investment market remained active."

One major en-bloc leasing transaction was Kerry Logistics which leased a total gross floor area of 131,627 sq ft at Sunhing Hungkai Godown in Tuen Mun.

Grade A Office Vacancy
Period Overall Central Wanchai / Causeway Bay Hong Kong East Tsimshatsui Kowloon East
End-Dec 21 9.6% 8.0% 9.6% 7.5% 10.3% 13.3%
End-Nov 21 9.6% 7.9% 9.7% 7.0% 10.4% 13.5%

Source: JLL Research

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