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News Release


Record high price for Murray Road plot will drive up office rents and prices

Prime Grade A office vacancy rate in Central is only 0.6%

​​HONG KONG, May 17, 2017 – Rents in Central rose 0.9% m-o-m in April and are expected to grow further after the Murray Road commercial plot sold for a record price, according to research in JLL's latest Monthly Market Monitor released today.

PRC leasing requirements continued to underpin leasing activity in Central, accounting for about 56% of all new lettings in April. In one of the more notable transactions, China Securities International leased 12,000 sq ft at Two Exchange Square.

Central's office rents grew to HKD115.7 per sq ft in April with vacancy in top-end of the market at extremely tight levels. The vacancy rate of prime Grade A office buildings in Central currently stands at just 0.6%.

Alex Barnes, Head of Markets at JLL, said: "We expect the Murray Road site will be developed to suit the price tag and fall within the premium end of the market where there is currently strong pent up demand. The expectation was that this site would fall to a mainland owner-occupier. The fact that it could be available to the wider occupier market is a positive for Central,"

"Occupier demand for the completed product will be strong, owing to the possible floor plate size and the potential for a large user to make a statement with a premium headquarters. In the interim this acquisition could provide further impetus to rental increases in Central where vacancy is at an incredibly low 1.7% and demand remains steady at the top end of the market."

Denis Ma, Head of Research at JLL, expects transaction volumes in office investment market to drop. "Many vendors will reset the asking prices for their office properties after seeing the Murray Road site fetch a record price. This will continue to put pressure on rental yields even if interest rates rise over the near-term" he said. 

In anticipation of a strong tender result for the Murray Road Carpark site, a handful of strata-titled units changed hands at near record high levels, in terms of unit price. According to market sources, a unit at Convention Plaza in Wan Chai sold for HKD 265.2 million or HKD 31,805 per sq ft, the second highest unit price in the building.


Grade-A Office Vacancy Rates

Wanchai /

Causeway Bay

Hong Kong EastTsimshatsuiKowloon East
End-April 20174.5%1.7%2.8%3.4%2.1%9.7%
End-March 20174.3%1.5%2.7%3.1%1.8%9.7%

Source: Research, JLL