The Zhitong Finance App learned that on May 22, the “Hong Kong Real Estate Market Watch” report published by JLL indicated that the overall Grade A office market achieved positive absorption of 248,000 square feet in April this year. The office market is receiving positive absorption, mainly due to the implementation of the newly completed AIA Tower in Wan Chai for personal use. New lease transactions obtained in the market during the month include China Mobile Hong Kong leasing a total of 47,400 square feet of floor space (floor area) on two floors of Block A of the Kwai Chung Kowloon Trade Centre to expand the floor space in the building.
As the office rental market improved moderately, the overall market vacancy rate fell to 13% at the end of April. The vacancy rates for Grade A office buildings in Wanchai/Causeway Bay and Kowloon East decreased by 0.2 and 0.3 percentage points, respectively, while vacancy rates in Central and Hong Kong East increased slightly by 0.1 and 0.3 percentage points, respectively.
Alex Barnes (Alex Barnes), managing director and head of the commercial department at JLL Hong Kong, said: In the short term, the weak economy and new office supply will continue to put downward pressure on office rents. However, a decrease in the medium- to long-term new supply of office buildings will ease the decline in rents. In view of the suspension of sales of Admiralty Queensway and the proposed drastic reduction in office space in the Kowloon Bay International Trade and Exhibition Centre redevelopment project, it is estimated that the total medium- to long-term new supply of Grade A office buildings may be reduced by about 2 million square feet.
Chung Chu-ru, senior director of JLL's research department, said that the decline in office rents in April was slightly narrower than in March. Overall market rents fell 0.4% month-on-month, while in March they fell 0.7%. Central rents fell by only 0.2%, compared to 1.3% in March. Hong Kong East rents fell 0.9%, while Tsim Sha Tsui and Kowloon East both fell 0.4%.