Hong Kong’s office market records positive net absorption in March

HONG KONG, April 25, 2024 – Hong Kong’s overall Grade A office market recorded a positive net absorption of 137,000 sq ft in March, according to JLL's latest Hong Kong Property Market Monitor released today.

It mainly due to realisation of pre-commitments in completed new projects. Among new lettings, an insurance company leased one floor with a total gross floor area of 53,600 sq ft at AIRSIDE in Kai Tak, to meet with growing business demand. It also showed that insurance companies, which benefited from the return of mainland tourists, are actively driving leasing demand in Hong Kong and continue and will continue to support leasing demand.

Partly due to completions of Six Pacific Place in Wanchai and Viva Place in Wong Chuk Hang, the overall vacancy rate rose to 13.1% as at end-March. Central and Wanchai / Causeway Bay's vacancies rose marginally by 0.1 and 0.3 percentage points, respectively, while vacancy in Kowloon East continue to improve and dropped 0.5 percentage points.

Alex Barnes, Managing Director and Head of Office Leasing Advisory at JLL in Hong Kong, said: “The leasing market is witnessing some marginal improvements. 38% of new lettings in the first quarter of 2024 are above 20,000 sq ft, compared to only 22% in the same period of 2023. The leasing volume of transactions between 20,000 to 50,000 sq ft increased by just under 5% in the first quarter of 2024. Insurance companies, financial institutions and luxury brands are the most active occupiers in the office leasing market. We expect larger new lettings to continue in the second quarter of 2024.”

Cathie Chung, Senior Director of Research at JLL, said: "Overall net effective rent dropped further by 0.7% m-o-m in March. Among the major office submarkets, rents in Central and Hong Kong East dropped further by 1.3% and 0.6%, respectively, while both Wanchai / Causeway Bay and Kowloon East's rentals rose marginally by 0.1%.” 

Source: JLL Research