Hong Kong office vacancy inches up to 9.5% in April

The Grade-A office market saw a net withdrawal of 99,400 sq. ft.

Overall Grade-A office vacancy rose to 9.5% in April, from 9.4% in the previous month, property consultant JLL reported.

It also recorded a net withdrawal of 99,400 sq. ft. in the Grade-A office market during the month.

Vacancy rate rose to 7.5% in Central from 7.3% in March as tenants move within the submarket. Wanchai and Causeway Bay also saw an increase to 9.6% from 9% over the same period.

“With many tenants still in cost-saving mode, the corporate downsizing trend continued in April,” Alex Barnes, Head of Office Leasing Advisory at JLL in Hong Kong, said.

“Occupiers have begun to reconfigure their post-pandemic real estate requirements, leading to rising demand for quality office buildings. We believe flight to building quality will remain a consistent market theme moving forward.”

Rents dropped 0.9% month-on-month in April, with the biggest decline recorded in Tsimshatsui.

Meanwhile, Nelson Wong, Head of Research at JLL in Greater China, noted industrial assets are currently attracting more institutional investors.

“The leasing market for warehouses picked up momentum in April, with a modest rise in expansions to accommodate business needs. Supply chain service provider SF Supply Chain, for example, expanded its presence at Tuen Mun Distribution Centre Block 1, leasing approximately 32,000 sq ft,” he said.

“Among the various property segments, industrial assets are catching more attention from institutional investors, with three major transactions reportedly concluded in April by investment funds with total consideration of around $4.5b.”