Overall Grade A office vacancy rate rises to 9.6% in July
According to JLL's latest Hong Kong Property Market Monitor, the overall vacancy rate of Grade A offices rose to 9.6% in July as several sizable spaces became available on the back of the traditional low season for the office leasing market.
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 the 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 also commented, "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%."