Office vacancy rate stabilises after four consecutive months of increases
Overall Grade A office rents remain subdued and fell 0.7% in August
HONG KONG, September 26, 2023 – The overall vacancy rate of Grade A office stayed at 12.8% as at end-August after it increased for four consecutive months since April, according to JLL's latest Hong Kong Property Market Monitor released today.
The overall vacancy rate was flat at 12.8% as at end-August. Central saw its vacancy rate rise to 9.9%, while Wanchai / Causeway Bay and Tsimshatsui experienced a drop of 0.6 and 0.7 percentage points in vacancy, respectively.
Alex Barnes, Managing Director and Head of Office Leasing Advisory at JLL in Hong Kong, said: "The overall market recorded a positive net absorption of 229,800 sq ft in August. It is a good sign in a relatively low demand office market. Office rents will remain under pressure as leasing demand remains subdued and new office supply is increasing.”
Among the handful of new lettings, the Hospital Authority leased around 100,000 sq ft (GFA) at Harbourside HQ in Kowloon Bay to relocate from the same district.
Cathie Chung, Senior Director of Research at JLL, said: "Overall net effective rent dropped by 0.7% m-o-m in August. Among the major office submarkets, Central and Wanchai / Causeway Bay witnessed rental drops of 0.8% and 0.3%, respectively, while Tsimshatsui saw a rise of 0.6%."
| Grade A Office Vacancy | ||||||
|---|---|---|---|---|---|---|
| Period | Overall | Central | Wanchai/Causeway Bay | Hong Kong East | Tsimshatsui | Kowloon East |
| End-Aug 23 | 12.8% | 9.9% | 9.6% | 12.8% | 10.3% | 19.5% |
| End-Jul 23 | 12.8% | 9.6% | 10.2% | 12.7% | 11.0% | 20.2% |
Source: JLL Research
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