Hong Kong office rents slip 0.2% in July as high vacancy rates persist

Wanchai / Causeway Bay and Kowloon East saw bigger rent declines. 

According to JLL, Hong Kong’s overall office market registered a net absorption of -89,000 sq ft in July. There continued to be some corporate downsizing activities though they have abated recently. 

“Meanwhile, the higher availability in the market offered more options to office tenants, some of whom took the opportunity to reconfigure their premises. For instance, healthcare company Bupa leased 92,500 sq ft (GFA) at The Quayside in Kwun Tong to consolidate its offices.”

Here’s more from JLL:

The vacancy rate in Central stayed at 7.4% as of end-July. Quality office buildings in the submarket have been met with greater occupier demand than the rest of the market. Notably, Henderson Land announced that The Henderson, a premium Grade A office building slated for completion in 2023, has secured its first tenant.

Despite a handful of buildings recording slight rental growth during the month, overall net effective rents fell 0.2% m-o-m as the higher vacancy rate exerted downward pressure on rents. Among the major office submarkets, Wanchai / Causeway Bay and Kowloon East experienced relatively larger rental decline. 

The investment market in Central has become more active. The whole block of C Wisdom Centre was sold for HKD 432 million (HKD 18,084 per sq ft), while a low level floor at The Center was offloaded by a local investor for about HKD 674 million (HKD 27,000 per sq ft).