Average office vacancy in Hong Kong island edged up 0.4%

Thankfully, rate is still at 5.2%.

According to CBRE, demand in the Hong Kong office leasing market weakened in Q3, for the third consecutive quarter. 

The easing in demand has spread beyond the core CBD into decentralised areas of Hong Kong Island and Kowloon.

Here's more from CBRE:

Slowing demand in Central is impacting on not only the number of transactions, but also their size, with most leasing activity this quarter happening for space under 10,000 sq. ft.

Despite weakening demand, vacancy remains tight. The average vacancy on HK Island increased slightly by 0.4% in Q3 but is still only 4.3%. Even in Central where vacancy has risen more rapidly in recent years, the current vacancy rate is still just 5.2%.

Larger occupiers face a lack of options as vacancy largely consists of pocket space. As such, despite sluggish demand, Hong Kong rents were stable in Q3 and have been largely flat year-to-date.

However, some landlords are becoming increasingly flexible on lease terms, offering longer lease agreements and initiating negotiations for renewals at an earlier stage.