Office vacancy rate on Hong Kong Island hits a record 12.6% in April

Quarry Bay and Wong Chuk Hang saw a significant increase in vacancies.

According to a Knight Frank report, the high vacancy rates continued to weigh on office rents in Hong Kong. The overall average Grade A office rent on Hong Kong Island softened in April 2024 to HK$64.2 per sq ft, dropping by 5.2% YoY and 0.5% year to date (YTD). 

“The overall vacancy rate on Hong Kong Island reached a record high of 12.6% in April, increasing from 12.2% in March. Quarry Bay and Wong Chuk Hang, in particular, saw vacancies rise significantly, reaching 14.9% and 18.3%, respectively,” the report said.

Here’s more from Knight Frank:

Most of the submarkets on Hong Kong Island experienced a rental decline, with Central experiencing the most significant decline of 9.1% YoY. 

The recentralization and flightto-quality trends persisted amid the downbeat market, with Enfusion Hong Kong relocating from Club Lusitano to Man Yee Building, with a floor space of 9,091 sq ft, and Infini Capital Management confirming that it would take 8,650 sq ft of floor space in Cheng Kong Center II. A manufacturing company from Chai Wai Industrial Building took advantage of the tenant-favoured environment to upgrade its office space to 12 Taikoo Wan Road, Quarry Bay. 

There have been continuous inquires and new demand from Chinese mainland companies. In general, small and medium-sized quality office space below 5,000 sq ft with a sea view and fitting out are more competitive and appealing in the market. Given the lack of new demand, we expect the office vacancy rate to remain high in the near term and overall rents on Hong Kong Island to fall by 0–3% in 2024.