Hong Kong Office Vacancy Rises To 11% In Oct
HONG KONG – The overall office vacancy in the Chinese territory rose to 11 percent at the end of October from 10.5 percent during the preceding month, according to a report from Jones Lang LaSalle (JLL) that was published on Friday (18 November, SGT).
According to the real estate consultancy’s latest Hong Kong Property Market Monitor, the increase in the overall office vacancy was “driven by the completions of Two Taikoo Place in Quarry Bay and 1 Sha Tsui Road in Tsuen Wan.”
In particular, Central has the lowest office vacancy but it edged up from 8.3 percent to 8.4 over the same period. Kowloon East continues to have the highest vacancy rate of 16.7 percent, but it’s a slight improvement from the 16.8 percent recorded in September.
At the same time, the office vacancy in Wanchai / Causeway Bay rose from 9.5 percent to 9.7 percent, while that in Tsim Sha Tsui dipped from 11.2 percent to 11 percent.
In October, the total office net absorption reached 479,000 sq ft, up from 157,000 sq ft during the previous month, thanks to the newly completed office developments.
JLL revealed that occupants continued to look for better workspaces during the period under review, particularly those in the financial industry. Notably, BOC Group Life Assurance agreed to lease 23,400 sq ft of gross floor area (GFA) at The Gateway Tower 5 in Tsim Sha Tsui, transferring from the World Finance Centre at Harbour City.
Meanwhile, average office rent in Hong Kong declined by 0.6 percent month-on-month to HK$55.9 psf in October compared to HK$56.3 psf in September. Still, the monthly office rental contraction eased from the 1 percent dip recorded during the preceding month.
“Among the major office submarkets, rentals in Wanchai / Causeway Bay and Tsim Sha Tsui dropped slightly by 0.2 percent and 0.1 percent, respectively, while rents in Central registered the largest drop of 0.6 percent,” said the property consultancy.
Furthermore, JLL disclosed that the tender for the sale of the China Evergrande Centre in Wanchai closed on 31 October 2022. The real estate consultancy expects that it will be one of the city’s several notable en bloc office deals in the coming years.