Overall Grade A office vacancy rate rises to 9.6% in July

HONG KONG, 25 August 2022 – The overall vacancy rate of Grade A offices rose to 9.6% in July as several sizeable spaces became available on the back of the traditional low season for the office leasing market, according to JLL's latest Hong Kong Property Market Monitor released today.

The overall vacancy rate of Grade A offices rose slightly from 9.4% in June, while the vacancy rate in Central also edged up from 7.9% to 8.2%. In contrast, Kowloon East's vacancy rate dropped to 12.6%.

Alex Barnes, Managing Director at JLL in Hong Kong, said: "The office market is quiet in July and August as the traditional low season of the market, with many senior executives taking the opportunity to travel overseas after the reopening of borders in most countries. We believe leasing activities will improve in the next few months. It would bring breakthrough demand to the office leasing market if the local government removed quarantine completely."

The Grade A office market recorded net absorption of 217,000 sq ft in July due to the completion of a government building in Kai Tak. As a notable expansion case, Far East Horizon leased 10,100 sq ft (GFA) at International Commerce Centre in West Kowloon for in-house expansion. IWG, the serviced office operator, also leased 33,000 sq ft (GFA) in the same building for expansion.

Nelson Wong, Executive Director of Research at JLL, said: "Overall net effective rents of Grade A office dropped further by 0.1% m-o-m in July. Among the major office submarkets, Central and Wanchai / Causeway Bay's rents registered a marginal decline of 0.1% and 0.2%, respectively, while rents in Tsimshatsui rose by 0.3%.” 

Source: JLL Research