Prime office rentals in Hong Kong plunge 9.5% YoY in Q1 2024

Overall, the Asia-Pacific region's prime office rental market reported a 3.2% YoY decrease.

Hong Kong's prime office market reported a 9.5% year-on-year decline and a 1.7% quarter-on-quarter drop, as per Knight Frank's Q1 2024 Asia-Pacific Prime Office Rental Index.

Overall, the Asia-Pacific region's prime office rental market reported a 3.2% YoY decrease, a sharper decline than the 2.4% drop observed in Q4 2023. 

This marks the seventh consecutive quarter of decline, largely influenced by rental decreases in cities across the Chinese Mainland, which hit record lows during the period.

Out of the 23 cities monitored by the index,15 recorded stable or increased rents, up from 13 cities in Q4 2023. 

Meanwhile, the Asia-Pacific prime office market is anticipated to remain tenant-friendly in 2024, with vacancy rates predicted to rise.

Regionally, vacancies edged up to 14.9%, continuing a trend of hitting record highs since Q4 2022.

“Although weaker in Chinese Mainland markets, we expect this recurring flight-to-quality theme to intensify as occupiers seek quality assets to optimise portfolios, experiment and evolve their hybrid work plans and hit ESG targets,” said Tim Armstrong, global head of occupier strategy and solutions.

“As momentum builds around portfolio dynamics, shifting from strategy to execution, occupiers will continue to align capex constraints with commercial real estate strategy."