Grade A office leasing volume drops 27% QoQ in Q2

The decline was due to major relocations and new project completions.

Grade A office leasing volume for Q2 softened compared to the previous quarter amidst major relocations and completion of quasi-government leasing deals, CBRE reported.

Gross leasing volume fell 27% quarter-on-quarter (QoQ) to 1.0 million sq ft. Over 30% of leasing activity occurred in buildings completed after 2021.

Meanwhile, office leasing volume for H1 2024 rose for the fourth consecutive quarter to 2.3 million sq ft, the highest half-yearly total since H1 2019. Net absorption for the period also hit a record high since H2 2018, registering 1.0 million sq ft.

Notable leasing activities include Central Hong Kong, which logged a 39,800 sq ft net absorption due to improved occupancy in The Henderson, and Kowloon East, which saw 183,300 sq ft absorbed through AIRSIDE occupancies.

New supply for Q2 reached 631,100 sq ft, bringing the half-year total to 1.5 million sq ft, whilst citywide vacancy reached 15.0 million sq ft or 16.9%. Rents fell 1.6% QoQ, resulting in a half-year decline of 2.1%.