Overall vacancy levels in Hong Kong office market to edge up in 2H14

Rents expected to remain relatively stable, however.

A cautiously optimistic 2H14 is forecast for the Hong Kong office market, even with the period expected to see overall vacancy levels edging up as returning space in some of Hong Kong Island's submarkets and Kowloon East becomes available.

According to CBRE's report entitled "Hong Kong Office MarketView 2Q14," however, leasing momentum is expected to stay positive, particularly towards 4Q14.

The report noted that this is when the banking and finance sector starts to see increased activity due to the Shanghai-Hong Kong Stock Connect pilot scheme.

Here's more from CBRE:

However, vacancy pressure is not evenly spread and limited to just a few buildings in Central and Kowloon East. Therefore, rents are expected to remain relatively stable for the rest of 2014.

Office leasing demand remained quiet with overall net absorption slowing to 18,750 sq ft (NFA) in 2Q14, bringing the y-t-d number for 1H14 to 174,150 sq ft (NFA). New letting demand for space in Central and Admiralty was primarily from mainland-based financial sector companies.

Kowloon saw negative net absorption in 2Q14 with Decentralized Kowloon being an exception where cost-conscious occupiers retained a strong appetite for cost-effective space.