Kowloon East space returns lift office vacancy to 13.5% in March

The area’s 20.4% vacancy rate is the highest amongst submarkets.

Hong Kong’s Grade A office market recorded a net negative absorption of 119,200 square feet (sq ft) in March, driven mainly by the return of multiple whole-floor units in Kowloon East after lease expirations, according to JLL.

Overall vacancy rose to 13.5% at the end of March 2026. The divergence between submarkets widened, with core districts showing tighter conditions, whilst fringe areas remained under pressure.

Kowloon East recorded the highest vacancy rate at 20.4%, up 0.9 percentage points (ppts) month on month (MoM), whilst Central recorded a decline in vacancy to 9.6%, down 0.3 ppts.

Wanchai and Causeway Bay stood at 10.3%, Hong Kong East at 12.7%, and Tsimshatsui at 6.8%, JLL added.

A mixed rental trend emerged across the market, as overall office rents increased 0.1% MoM.

Central led rental growth with a 3.8% year-to-date increase. Rents in Tsimshatsui and Hong Kong East remained unchanged MoM, whilst Kowloon East recorded a 0.7% monthly decline.

Leasing activity included a major pre-commitment in West Kowloon. J.P. Morgan signed a ten-year anchor lease at Artist Square Towers in the West Kowloon Cultural District for about 250,000 sq ft across six connected floors, with completion scheduled for 2027.

Other transactions included World-Wide House, where a low-zone unit of 16,700 sq ft was leased in the high $30s per sq ft range. One Hennessy saw a 6,100 sq ft high-zone lease.

No rent data was available for Artist Square Towers or One Hennessy, JLL noted.

In investment activity, New Success Holdings acquired 299 QRC in Sheung Wan from receivers for $611.4m, or $6,470 per sq ft, with an estimated yield of about 6%.