Hong Kong Office Rents

Hong Kong Office Rents Expected To Fall By 7-9% In 2024

HONG KONG – The latest data from Cushman & Wakefield (C&W) showed that positive net absorption returned to the city’s office market during the fourth quarter, but the high availability of workspaces continues to negatively impact office rents, according to a press release published on Thursday (December 7, SGT).

As of mid-November, overall net absorption in Hong Kong’s Grade A office segment reached 379,700 sq ft for Q4 2023, primarily driven by pre-committed office spaces at newly completed office developments in Kowloon West.

In particular, the Kowloon West office submarket alone recorded a net absorption of 334,200 sq ft, while all other office submarkets also returned to positive territory, except for Greater Central.

However, overall office net absorption from the start of 2023 until mid-November stood at -267,100 sq ft, pushing up the office availability rate to 18 percent. Consequently, office rents fell by 7.2 percent during the aforesaid period.

“After the border reopening, the recovery in office leasing momentum has been slower than the market expectation,” noted John Siu, Managing Director, Head of Project and Occupier Services, at C&W Hong Kong.

He said if the new office stock expected to be completed before the end of 2023 is taken into account, Hong Kong’s overall office availability rate could exceed 19 percent by then, surpassing the peak during the first quarter of 2004 of 18.1 percent.

“In addition, with nearly 1.2 million sq ft of new office supply being scheduled next year, we forecast that office rents will continue to adjust downwards by 7 percent to 9 percent in 2024, providing greater options of quality office spaces with attractive pricing for occupiers planning for upgrades or relocation,” added Siu.

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