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News Release

HONG KONG

Office take-up returns to growth in Central, Wanchai/Causeway Bay


​HONG KONG, 29 March 2016 – Demand from large occupiers supported a positive net take-up in Central and Wanchai/Causeway Bay in February, returning these two office submarkets to growth, according to JLL's latest Hong Kong Property Market Monitor released in March.

Net take-up in Central and Wanchai/Causeway Bay amounted to 11,500 sq ft and 55,200 sq ft, respectively. The most notable transaction was Hong Kong Stock Exchange's relocation and consolidation to four floors at One Exchange Square in Central. Another was an international business services provider that upgraded and consolidated its offices from Central to several floors at Lee Garden One in Causeway Bay.

But leasing activity in the overall office market remained weak. Coupled with the return of a large tract of vacated space, the overall occupier market contracted slightly by 10,900 sq ft in February.

Average Grade A office rent in Central was flat at HK$103.9 per sq ft, while the vacancy rate stayed at 1.3%.

During the month, the government released its 2016/17 Land Sale Programme (Programme). There are eight commercial sites capable of delivering 5.8 million sq ft of office/commercial space.  

Alex Barnes, Head of Hong Kong Markets at JLL, said: "We welcome the government releasing more commercial sites for sale. With vacancy sitting close to record-low levels, any supply, particularly in Central, will provide more opportunities for existing businesses to expand their operations. The Murray Road Multi-storey Car Park—the first commercial development site in Central to be offered for tender in 20 years—will be of particular benefit to the traditional 'engine room' of Hong Kong, banking and finance, should the floor plates are at or exceed 20,000 sq ft."

Denis Ma, Head of Research at JLL, said: "The development of the Kai Tak office node looks like it will finally be underway with two sites included in the Programme. The first site, 1E2 (NKIL 6557) straddles the Shatin-Central-Rail Link. The second site, 1F2 (NKIL 6556), which is located nearby, is a commercial/hotel development site. Combined, these two sites could yield over 1 million sq ft of office/commercial space, with expected completion in 2020, at the earliest.

 

Grade A Office Vacancy Rates
PeriodOverallCentral

Wanchai /

Causeway Bay

Hong Kong EastTsimshatsuiKowloon East
End-February 3.3%1.3%2.2%1.0%1.8%5.2%
End-January 3.2%1.3%2.6%1.4%1.6%5.1%

Source: Research, JLL​

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