On June 26, Jones Lang LaSalle released its latest report, stating that the overall vacancy rate of grade A office buildings in Hong Kong rose to 13.5% at the end of May, mainly due to the completion of new commercial buildings.
Zhongtong Finance app learned that on June 26, Jones Lang Lasalle released its latest report, stating that the overall vacancy rate of grade A office buildings in Hong Kong rose to 13.5% at the end of May, mainly due to the completion of new commercial buildings.
The two new commercial projects, Cheung Kong Center Phase II and No. 350 Kwun Tong Road, were completed in May. The overall net absorption of grade A office buildings in the same month was 21,200 square feet, partly due to the completion of the new projects. However, the new supply also pushed up the vacancy rates in Central and East Kowloon to 12% and 18.5%, respectively. In contrast, the vacancy rates in Wan Chai/Causeway Bay and East Hong Kong Island fell by 0.2 and 0.1 percentage points, respectively, by the end of May. In terms of leasing demand, insurance companies continued to expand, with new lease cases recorded in May, including AIA's expansion in two towers of Kam Hing Building, leasing the entire floor with a total floor area of 18,400 square feet (construction area).
According to Guo Liyan, head of the commercial department of Jones Lang Lasalle Hong Kong Island, the office leasing market is still most active among insurance companies. Despite new supply pushing up office vacancy rates, the new commercial building supply will gradually be consumed by the market because many tenants take advantage of significantly lower rents to look for commercial buildings to improve the quality of office space.
According to Zhongchu Ru, senior director of research at Jones Lang Lasalle, the overall market actual rent for May decreased by 0.8% month-on-month, marking the 25th consecutive month of decline since May 2022. Among the major regional markets, rents in Central and East Hong Kong Island fell by 1.3% and 0.8%, respectively, while rents in Tsim Sha Tsui and East Kowloon fell by 0.5% and 0.9%, respectively.
On June 26, Jones Lang Lasalle released its latest report, stating that the overall vacancy rate of grade A office buildings in Hong Kong rose to 13.5% at the end of May, mainly due to the completion of new commercial buildings.