Hong Kong Grade A Office Rents Up 0.2% In Oct
HONG KONG – Overall net effective rents of Grade A office space across the Chinese territory edged up by 0.2 percent month-on-month to HK$55.9 in October, reversing the 0.1 percent dip in September (HK$55.7), according to Jones Lang LaSalle’s (JLL) latest Hong Kong Property Market Monitor.
“Among the major office submarkets, both Central and Tsim Sha Tsui registered rental growth during the month,” said the real estate consultancy.
Another positive news is that the overall vacancy across Hong Kong slid to 9.7 percent in October from 9.8 percent during the preceding month. However, that for Central rose from 7.8 percent to 7.9 percent.
JLL noted that overall net absorption in October was 107,200 sq ft, a sharp turnaround from the -180,100 sq ft recorded in September.
“There were more instances of expansion recorded in the market, while tenants continued to look for flexibility and wellness amenities in the workplace. To meet the growing demand for flex space, business centre operator IWG leased 2 floors with a gross floor area (GFA) of 23,400 sq ft at Tower 535 in Causeway Bay to open a new centre.”
“The leasing market was also active in Central during the month. Notably, investment management firm Apollo Global Management leased a floor with net floor area (NFA) of 13,900 sq ft at One Exchange Square to relocate within the submarket.”
Meanwhile, Hong Kong’s office investment market was dominated by primary sales. For example, New World Development divested 3 high-level floors at Cheung Sha Wan’s 888 Lai Chi Kok Road, a Grade A office building, for about HKD 1.19 billion (HK$17,500 psf). The buyer is Nanyang Commercial Bank and the commercial property is expected to be ready by 2022.