Commercial Real Estate News
Hong Kong's Central Office Market Enjoys First Rent Increase Since 2022
Hong Kong's Central district posted its first rise in Grade A office rents in more than two years, as tightening vacancy in top-tier towers bolstered landlord confidence, according to new data from JLL.
Average Grade A rents in Central edged up 0.1% in November from the prior month--the first increase since May 2022--JLL said Wednesday in its Hong Kong Monthly Market Dynamics report. The marginal uptick comes as occupancy in prime buildings improves and leasing momentum shows signs of stabilizing.
"Occupancy in Central's premium Grade A offices is trending up as tenant expansion and flight to quality gathers pace," said Alex Barnes, managing director of JLL in Hong Kong, Macau and Taiwan. "This supported rental stability and prompted a modest uptick over the month."
One of the most notable deals involved Migao Group Holdings, which leased 10,201 square feet at Cheung Kong Center II in Central for expansion, relocating from COFCO Tower in Causeway Bay.
Citywide, the overall office vacancy rate continued a gradual decline to 13.1%. Wanchai/Causeway Bay and Tsimshatsui posted some of the most significant improvements, with vacancies falling to 10.5% and 7.5%, respectively. Central's overall vacancy, however, widened by 0.5 percentage points to 11.5% as newly vacated space came back onto the market.
Hong Kong's Grade A office sector recorded a positive net absorption of 293,300 square feet in October, propelled by ongoing corporate consolidation and a sustained flight-to-quality trend. Overall rents were largely unchanged month-over-month, though performance varied across and within submarkets.
