Overall office vacancy rate sees first drop in ten months

HONG KONG, April. 24, 2023 – The overall vacancy rate of Grade A offices dropped to 12.0% as of end-March, the first drop since May 2022, according to JLL's latest Hong Kong Property Market Monitor released today.

Grade A offices' overall vacancy rate dropped slightly from 12.2% at the end of February to 12.0% at the end of March. The vacancy rate in Wanchai / Causeway Bay and Kowloon East dropped to 9.6% and 19.3%, respectively, while Central's vacancy rate remained flat.

Alex Barnes, Managing Director at JLL in Hong Kong, said: "Inspections and negotiations for office space turned more active since the border reopening. The office market also recorded some sizable leasing transactions last month, which helped to reduce the vacancy rate of the overall market. It also helped the market recorded a positive net absorption of 203,900 sq ft in March."

Among a handful of new lettings, MUFG bank leased two floors with a total gross floor area of 86,800 sq ft at AIRSIDE in Kai Tak to consolidate its offices in Central and Quarry Bay.

Nelson Wong, Executive Director of Research at JLL, said: "Overall net effective rents dropped by 0.2% m-o-m in March. Among the major office submarkets, rentals in Wanchai / Causeway Bay and Kowloon East dropped by 0.4% and 0.3%, respectively, while Central's rent remained flat."

Source: JLL Research