Overall Grade A office market records a negative take-up in July
Leasing demand from travel and leisure sector returns
HONG KONG, August 29, 2023 – Hong Kong’s overall Grade A office leasing market recorded a negative net absorption of 224,600 sq ft in July, according to JLL's latest Hong Kong Property Market Monitor released today.
However, the travel and leisure sector gained momentum due to the borders reopening. An e-commerce travel platform KKday recently leased around 7,600 sq ft (GFA) at One Kowloon in Kowloon Bay to expand its office from Eastmark in the same district.
Alex Barnes, Managing Director and Head of Office Leasing Advisory at JLL in Hong Kong, said: "We began to see the return of leasing demand from the insurance, medical, travel and leisure sectors. We expect to see more leasing transactions from these sectors close in the next few months.”
The overall vacancy rate rose marginally to 12.8% as at end-July. Central saw its vacancy rate rise to 9.6%, while both Wanchai / Causeway Bay and Hong Kong East experienced a 0.2 percentage point increase in vacancy.
Cathie Chung, Senior Director of Research at JLL, said: “Overall net effective rent edged down by 0.6% m-o-m in July. Among the major office submarkets, Central and Wanchai / Causeway Bay witnessed rental drops of 0.6% and 1.4%, respectively, while Tsimshatsui saw a marginal increase of 0.1% in rentals.”
| Grade A Office Vacancy | ||||||
|---|---|---|---|---|---|---|
| Period | Overall | Central | Wanchai / Causeway Bay | Hong Kong East | Tsimshatsui | Kowloon East |
| End-July 23 | 12.8% | 9.6% | 10.2% | 12.7% | 11.0% | 20.2% |
| End-June 23 | 12.6% | 9.4% | 10.0% | 12.5% | 10.7% | 20.1% |
Source: JLL Research
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