New completions raise Grade A office vacancy rate to 11%: JLL

The completion of Two Taikoo Place contributed to the vacancy rate.

The overall Grade A office market posted new projects, bringing the vacancy rate increase to 11% in October, JLL's property market monitor revealed.

This was an increase from 10.5% increase in September. Boosting the vacancy rate are the completion of Two Taikoo Place in Quarry Bay and 1 Sha Tsui Road in Tsuen Wan.

The rates in Central and Wanchai/Causeway Bay went up marginally to 8.4% and 9.7%, respectively, whilst Tsimshatsui's vacancy rate declined to 11% from 11.2%.

The overall net absorption was 479,000 square foot (sq ft) in October stemming from the realisation of pre-committed space in new completions during the month.

Alex Barnes, managing director at JLL in Hong Kong, said the new completions may have increased vacancy rates but they noticed that tenants are upgrading their office spaces due to new choices.

"The new quality office buildings would be welcomed by these kinds of tenants," Barnes said.

One of the major sales was "BOC Group Life Assurance leasing 23,400 sq ft (GFA) at The Gateway Tower 5 in Tsimshatsui, relocating and upgrading from the World Finance Centre within the Harbour City portfolio."