Grade A offices rent fell 16% QoQ in Q3

Net absorption totalled 125,400 sq. ft., staying positive for a fifth consecutive quarter.

Grade A office rents in Hong Kong fell 16% quarter-on-quarter (QoQ) to 993,000 square  feet (sq. ft.) in the third  quarter (Q3), bringing year-to-date (YTD) volume to 3.6 million sq. ft., according to CBRE.

The vacancy overhang ensured rents declined for the 21st consecutive quarter, dropping 2.6% QoQ. This was a sharper decline from the 1.6% QoQ decrease seen in the preceding quarter, bringing the YTD decline to 4.7%. 

Greater Central rents dropped 2.8% QoQ due to vacancy pressure in new stock. Negative net absorption saw overall rents in Kowloon East drop 4.7% QoQ, accelerating from -2.2% QoQ in Q2 2024, also the sharpest fall since Q3 2020.

Net absorption totalled 125,400 sq. ft., staying positive for a fifth consecutive quarter. Greater Central recorded a 52,100 sq. ft. net absorption, partly driven by improved occupancy in Cheung Kong Center II.

The lack of new supply combined with positive net absorption pulled down the overall vacancy rate by 0.1 percentage point to 16.8%, marking the second quarterly decline since Q1 2019.

“We expect leasing activities to become more active as the market has a greater clarity on the economic outlook in 2025. Whilst overall vacancy improved, it remains at historically high levels. High vacancy rates and new supply are likely to continue driving rents downward in the short term,” Ada Fung, Executive Director of CBRE Hong Kong, said.