Premium offices in non-core business areas continue to attract tenants
Overall Grade A office rents fell 0.5% in June
HONG KONG, July 25, 2023 – Premium offices in decentralised submarkets continued to attract tenants with upgrading demand, according to JLL's latest Hong Kong Property Market Monitor released today.
One of the notable transactions is international law firm Stephenson Harwood leased one floor with a lettable floor area of 21,900 sq ft at One Taikoo Place in Quarry Bay for relocating and upgrading its office from United Centre in Admiralty.
Paul Yien, Executive Director at JLL in Hong Kong, said: "Grade A office rents are 31% lower than the market peak in 2019 which has lured some companies to take the opportunity to lease quality offices to upgrade their workplace. In particular, a number of premium Grade A offices have been completed in recent years or are scheduled for completion within a year, such as The Henderson in Central and Viva Place in Island South, which has provided more incentives to tenants to relocate. The consolidation and upgrading activities are expected to continue to support the office leasing demand in the second half of this year."
The overall market recorded a negative net absorption of 121,000 sq ft in June. The overall vacancy rate in Central rose to 9.4% at the end of June, while Tsimshatsui's vacancy rate dropped slightly to 10.7%.
Cathie Chung, Senior Director of Research at JLL, said: "Overall net effective rent edged down by 0.5% m-o-m in June. Among the major office submarkets, rentals in Wanchai/Causeway Bay and Tsimshatsui rose marginally by 0.1% and 0.2%, respectively, while Central's rent fell marginally by 1.0%."
|Grade A Office Vacancy|
|Period||Overall||Central||Wanchai/Causeway Bay||Hong Kong East||Tsimshatsui||Kowloon East|
Source: JLL Research
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