Office vacancy rates slightly improves in September

Office rents retreated by 1% MoM.

Overall Grade A office leasing market reported a slight improvement with the overall vacancy rate dropping to 12.7% in September, according to JLL’s latest Hong Kong Property Market Monitor.

Three major business districts reported improved vacancy rates. Central’s vacancy rate decreased by 0.3% while Tsimshatsui and Kowloon East vacancy rates dropped by 0.4% and 0.3% respectively. 

“Last month, the overall Grade A office market showed further improvement, with a positive net absorption of 66,100 sq ft. Notably, it is also the first time in two years that Tsimshatsui’s vacancy rate fell below 10% as the supply is tight in this district,” Alex Barnes, Managing Director and Head of Office Leasing Advisory at JLL in Hong Kong said.

Additionally, the MTR Corporation leased around a gross floor area of 135,000 sq ft at One North in Yuen Long to accommodate its business expansion.

"Overall net effective rent retreated by 1.0% m-o-m in September. Among the major office submarkets, Central and Wanchai / Causeway Bay witnessed rental drops of 1.5% and 0.4%, respectively, while Kowloon East’s rent remained flat," Cathie Chung, Senior Director of Research at JLL said.

In August, Grade A Office vacancy rates was at 12.8%.