Rate of office vacancy stables in August after four-month high

Rents will remain under pressure amidst low demand and high supply.

As of the end of August, the Grade A office vacancy rate in Hong Kong remained unchanged at 12.8%, following four consecutive monthly increases since April, according to JLL's latest Hong Kong Property Market Monitor.

"The overall market recorded a positive net absorption of 229,800 sq ft in August. It is a good sign in a relatively low-demand office market. Office rents will remain under pressure as leasing demand remains subdued and new office supply is increasing,” Alex Barnes, Managing Director and Head of Office Leasing Advisory at JLL in Hong Kong commented.

However, Central witnessed an increase in its vacancy rate, reaching 9.9%, while Wanchai/Causeway Bay (9.6%) and Tsimshatsui (10.3%)  saw a decrease of 0.6 and 0.7 percentage points in their vacancy rates, respectively.

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Among the few recent lease agreements, the Hospital Authority has secured approximately 100,000 sq ft (GFA) of space at Harbourside HQ in Kowloon Bay for its relocation from the same district.

Cathie Chung, Senior Director of Research at JLL said the overall net effective rent decreased by 0.7% month-on-month. Notably, in the primary office submarkets, Central and Wanchai/Causeway Bay experienced rental declines of 0.8% and 0.3%, respectively, while Tsimshatsui observed a 0.6% increase in rent.