Overall Grade A office market records positive net absorption in April

HONG KONG, 27 May 2025 – The overall Grade A office leasing market recorded a positive net absorption of 39,700 sq ft in April after the negative net absorption recorded in March, according to JLL's latest Hong Kong Monthly Market Dynamics released today.

The leasing demand is mainly driven by upgrading activities. Notably, The Payment Cards Group Limited, a payment technology company, leased 12,100 sq ft (GFA) at World Finance Centre in Tsimshatsui, relocating and expanding from Kowloon East.

Alex Barnes, Managing Director at JLL in Hong Kong, said: "We observed an uptick in leasing momentum in certain sectors, particularly finance and insurance as well as education. These industries are actively securing office space. In addition, upgrading continues to be the major trend as ample new supply is attracting the tenants to relocate to higher quality spaces which better serve their business and talent needs."

The overall office vacancy rate held steady at 13.7% last month, with divergent performances across submarkets. Central and Hong Kong East experienced increases in vacancies, rising to 11.7% and 14.0%, respectively, mainly due to available space resulting from prior consolidations and relocations. In contrast, Wanchai/Causeway Bay, Tsimshatsui, and Kowloon East recorded decreases in vacancies of 0.3, 0.4, and 0.3 percentage points, respectively."

Despite stable office vacancy rates, rents continued their downward trend in April, recording a slight m-o-m decrease of 0.5%. Central experienced a modest decline of 0.4%, while other key submarkets, including Wanchai/Causeway Bay, Hong Kong East, and Kowloon East, saw more pronounced drops of 0.6% each. This latest dip marks the 36th consecutive month of rental declines since May 2022.

In the residential market, Cathie Chung, Senior Director of Research at JLL, said: "Overall residential transactions rose 6.1% m-o-m in April, with secondary market transactions increasing to 4,080 units, reflecting a rebound in demand. While transaction volumes in the primary market dropped to 1,614 units, the sales market remained robust, fuelled by the successful launch of several sizable projects. It is worth noting that the one-month HIBOR dropped to 0.59% as of 26 May, down 3.36 percentage points from the end of April. This reduction is expected to lower the repayment costs for borrowers with HIBOR-linked mortgages, sending a positive signal to the market. It may further boost sentiment in the residential sales market if rates continue to decline."

Source: JLL Research