HK Office Rents Down 0.2% In March: JLL

HONG KONG – Grade A office rents in the Chinese territory dipped by 0.2 percent month-on-month in March after remaining unchanged in February 2022, according to Jones Lang LaSalle’s (JLL) latest Hong Kong Property Market Monitor.

Monthly office rents in Hong Kong slid to HK$57.4 psf in the month under review from HK$57.5 psf in February.

“Among the major office submarkets, Central registered a mild rental decline of 0.1 percent, while Hong Kong East experienced the biggest rental decline,” said JLL.

As for the overall office vacancy, it increased from 9.1 percent during the previous month to 9.4 percent in March. In particular, that in Central dipped from 7.4 percent to 7.3 percent. On the other hand, Kowloon East continued to see the highest vacancy rate among major office submarkets at 12.5 percent, up from 12.4 percent in February.

Hong Kong’s office leasing market “was quiet in March due to the continued social distancing measures amid the 5th wave of the pandemic,” noted the real estate consultancy.

But while tenant demand was sustained, the overall net absorption was merely 56,200 sq ft in March compared to 276,500 sq ft in the preceding month.

One notable office transaction is coworking space operator IWG continued to expand its footprint by agreeing to lease 64,800 sq ft at Swire Property’s newly-refurbished 8 Queen’s Road East office tower, which is just adjacent to the Admiralty Station, for the company’s “Spaces” brand.

A 6,700 sq ft office space was also leased at The Octagon for about HK$20 psf per month in March, a 9,500 sq ft commercial space at The Gateway Tower 2 was occupied for around HK$50 psf, while 11,700 sq ft were taken up at One Kowloon for roughly HK$20 psf.