New lettings in Central dropped by a whopping 75% in July

17,300 sq ft of space was withdrawn.

The number of new lettings in Central dropped by 75% m-o-m in July, a traditional low season of the office market, according to JLL’s Property Market Monitor in August

Leasing activity slowed amidst the summer school holidays with a net withdrawal of 17,300 sq ft recorded in the overall market. However, PRC banking and financial services firms remained active, accounting for about 91% of all new lettings in Central, in terms of floor area leased.

Alex Barnes, Head of HK Markets at JLL, said: “Office rents in Central climbed 0.1% m-o-m, led by a 0.3% m-o-m expansion in Grade A3 office rents and a strong demand for trophy buildings like Two IFC. Meanwhile, rents in Wanchai/Causeway Bay also advanced by 0.7% m-o-m as vacancy in the submarket dropped for the third consecutive month. Wanchai/Causeway Bay and Kowloon East benefitted from ongoing tenant decentralisation as MNCs seek out cost-effective options. This trend will
continue.”

Denis Ma, Head of Research at JLL in Hong Kong, said: “A buoyant stock market and upbeat economic data suggests that the recent lull in the office leasing market will be temporary. Still, with the majority of MNCs looking to control costs and more new supply coming online, rental growth is likely to be slower in the coming months compared to earlier in the year.”