Hong Kong Grade A Office Vacancy Rises To 12.8%

Office Finder Team

August 28, 2023

Hong Kong

HONG KONG – The overall vacancy of Grade A office properties across the Chinese territory rose to 12.8 percent in July from 12.6 percent in June, according to Jones Lang LaSalle’s (JLL) latest Hong Kong Property Market Monitor.

Most office submarkets saw a 0.2 percentage point uptick in vacancy. For example, the Grade A office vacancy in Central increased to 9.6 percent to 9.4 percent over the same period. That in Wan Chai / Causeway Bay climbed to 10.2 percent from 10.0 percent previously, while that in Hong Kong East edged up to 12.7 percent from 12.5 percent.

Tsim Sha Tsui recorded the highest increase in Grade A office vacancy from 10.7 percent to 11 percent. On the other hand, Kowloon East registered the smallest gain in vacancy from 20.1 percent to 20.2 percent.

JLL revealed that Hong Kong registered a net absorption of -224,600 sq ft during the period under review compared to -121,000 sq ft in June.

Moreover, the average monthly rent slid 0.6 percent month-on-month to HK$53.8 psf in July from HK$54.1 psf during the preceding month. In June, overall Grade A office rents in Hong Kong dipped by 0.5 percent on a monthly basis.

In July, there were some notable office leasing transactions. In Kowloon Bay, landlord CSI Properties was involved in Hong Kong’s biggest office rental deal so far this year when it clinched Hong Kong’s Hospital Authority as a tenant for a 100,000 sq ft workspace at its Harbourside HQ development.

In Kowloon Bay again, Kuwaiti-backed Wafra Capital Partners took up 13,900 sq ft at Billion Centre Tower A. In the same submarket, local e-commerce travel platform KKday took up 7,600 sq ft of gross floor area (GFA) at One Kowloon to expand its office from Eastmark in the same submarket.

In the capital market, DL Holdings Group acquired the top five office floors and the naming rights of 92 Wellington in Central for HK$300 million ($38.3 million) in July. The HKEX-listed finance company will relocate its HQ to the building, which is poised to be renamed as DL Tower.