Central Hong Kong office vacancy rate improved marginally as market shows signs of stabilization
According to JLL's latest Hong Kong Property Market Monitor report, Hong Kong's leasing volume in the Grade-A office market improved in the first quarter of 2021 as occupiers started to resume making real estate decisions.
Central's Grade-A office rents have dropped 29.7% from the market peak at the beginning of June 2019 to a more attractive level, there was a positive net take up of office space (40,400 sq. ft) in the submarket during the month. Central vacancy decreased slightly from 7.5% to 7.3% as of the end of March. A notable leasing deal was rating agency S&P Global committing to office space at Three Exchange Square in Central, relocating from International Commerce Centre in West Kowloon.
Alex Barnes, Head of Office Leasing Advisory at JLL in Hong Kong says, "Office leasing demand will improve in the coming quarters as occupiers continue to execute real estate decisions that were heavily muted in 2020. Workplace upgrades and a flight to quality will continue to be a key theme of this demand."
"We expect the downward pressure in the office market to remain this year, but the overall fall in rental will be moderate in the second half of 2021. In March, the overall Grade-A office rents declined by 0.5% m-o-m. Among major office submarkets, Kowloon East experienced the biggest rental drop, whereas rents in Central were relatively stable," commented Nelson Wong, Head of Research at JLL in Greater China.