At the end of last month, the overall vacancy rate of Grade A office market in Hong Kong rose to 13.7%. The vacancy rates in Central and Eastern Hong Kong Island decreased to 12.0% and 13.1% respectively. In contrast, the vacancy rate in East Kowloon increased by 0.5 percentage points.
According to JLL's "Hong Kong Property Market Watch" report, the vacancy rates of Grade A offices in Central and Eastern Hong Kong Island improved in July, but office rents continued to decline slightly. The report stated that at the end of last month, the overall vacancy rate of Grade A office market in Hong Kong rose to 13.7%. The vacancy rates in Central and Eastern Hong Kong Island decreased to 12.0% and 13.1% respectively, while the vacancy rate in East Kowloon increased by 0.5 percentage points. The Grade A office market recorded a net absorption of -0.1289 million square feet in July, mainly due to a large amount of vacant floor space in East Kowloon being reintroduced to the market.
Alex Barnes, Hong Kong Managing Director and Head of Commercial Department at JLL, said that the Hong Kong office leasing market is still mainly driven by demand from tenants looking to improve the quality of their workspace. More and more tenants are seeking quality commercial buildings to enhance the quality of their office space, and Grade A office rents have fallen by 36.5% since the peak in 2019, making them attractive to this type of tenant.
Cheryl Chung, Senior Director of Research at JLL, said that the overall market rents in July decreased by 0.7% compared to the previous month. In the main districts, rents in Central and East Kowloon decreased by 0.8% and 0.6% respectively. Rents in Wan Chai/Causeway Bay and Eastern Hong Kong Island decreased by 0.6% and 1.0% respectively.