News release

Grade-A office rents decline for the 21st consecutive month

Investors will eye on retail and industrial properties in the second quarter of this year

March 17, 2021

HONG KONG, 17 March 2021 – Overall Grade-A office rents declined for the 21st consecutive month in February due to the subdued leasing demand, according to JLL's latest Hong Kong Property Market Monitor released today.

Grade-A office rents dropped 0.8% m-o-m in February, after falling 0.6% m-o-m in January. Rents in Tsim Sha Tsui dropped 1.7% m-o-m, the highest among major office submarkets. However, rents in decentralised office submarkets, namely Hong Kong East and Kowloon East, remained stable.

Since the leasing demand remains weak, the overall Grade-A office net absorption reached -55,100 sq ft last month. Total surrender space rose to about 1.77 million sq ft, the highest level ever recorded, as corporate occupiers attempted to save rental costs by downsizing in the midst of the current recession.

Despite this, the vacancy rate in the overall Grade-A market remains stable, while Central's vacancy rate stood at 7.5% as of the end of February. There were some tenant movements within the submarket. For instance, financial print service provider REF Financial Press leased a gross floor area of 21,300 sq ft at The Center.

Alex Barnes, Head of Office Leasing Advisory at JLL in Hong Kong, said: "The Covid-19 pandemic has prompted tenants to reconfigure their workplace and, in some cases, seek flexibility as part of their solution. Flexible workspace providers continue to expand in Hong Kong on the back of this and moves from some big name occupiers seeking solutions for work from anywhere staff."

In terms of the property investment market, Nelson Wong, Head of Research at JLL in Greater China, said: "Investors have been more interested in buying retail and industrial properties in recent months as the retail rents are expected to bottom out in the coming months, and the pandemic has spurred online sales that in turn lifted logistics and storage space demand. The government's pilot scheme for charging land premium at standard rates for redeveloping industrial buildings will also lure investors to eye on industrial assets with redevelopment potential. We expect the retail and industrial properties will continue to be the focus of investors in the second quarter of this year."

Grade-A Office Vacancy




Wanchai /

Causeway Bay

Hong Kong East


Kowloon East

End-Feb 21







End-Jan 21







Source: JLL Research

About JLL

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