Jones Lang LaSalle's "Hong Kong Real Estate Market Watch" report released today (26th) pointed out that by the end of May, the overall vacancy rate of Grade A office market has risen to 13.5%, mainly due to new commercial buildings being completed. In May, the net absorption of Grade A office market was 21,200 square meters, and one of the reasons was the completion of new projects. However, the new supply also pushed up the vacancy rate in Central and East Kowloon to 12% and 18.5%, respectively. In contrast, as of the end of May, the vacancy rates in Wan Chai/Causeway Bay and East Island decreased by 0.2% and 0.1%, respectively. In terms of leasing demand, the insurance industry continues to expand, and new leasing cases recorded in May include AIA's expansion in two buildings of Kwai Wah Building in leasing the entire floor with a total area of 18,400 square meters. Sam Gourlay, head of commercial department of the bank, said that the office leasing market is still most active with insurance companies. Although new supply pushed up the vacancy rate of office buildings, the new commercial building supply will gradually be absorbed by the market, as many tenants take advantage of significantly lower rents to find commercial buildings to improve the quality of office space. Chung Chuyu, senior director of the bank's research department, said that the actual monthly rent of the overall market in May fell by 0.8%, the 25th consecutive month of decline since May 2022. Among the major market areas, the rents in Central and East Island fell by 1.3% and 0.8%, respectively, while those in Tsim Sha Tsui and East Kowloon fell by 0.5% and 0.9%, respectively.

Two new commercial projects, including Central River Group Center Phase II and 350 Kwun Tong Road, were completed in May, resulting in a net absorption of 21,200 square feet in the overall Grade A office market in the same month. The new supply also pushed the vacancy rates in Central and East Kowloon to 12% and 18.5%, respectively. In contrast, however, the vacancy rates in Wan Chai/Causeway Bay and East Island decreased by 0.2% and 0.1%, respectively. The insurance industry continued to expand its leasing demand, including AIA's expansion in leasing the entire floor of the two buildings of Kwai Wah Building with a total area of 18,400 square feet.

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Sam Gourlay, head of the bank's commercial department, said that the office leasing market is still most active with insurance companies. Although new supply pushed up the vacancy rate of office buildings, the new commercial building supply will gradually be absorbed by the market, as many tenants take advantage of significantly lower rents to find commercial buildings to improve the quality of office space.

Chung Chuyu, senior director of the bank's research department, said that the actual monthly rent of the overall market in May fell by 0.8%, the 25th consecutive month of decline since May 2022. Among the major market areas, the rents in Central and East Island fell by 1.3% and 0.8%, respectively, while those in Tsim Sha Tsui and East Kowloon fell by 0.5% and 0.9%, respectively.