Office rents decline persist in Q3

Central and Kowloon East saw the highest vacancy.

Office rents across all districts in Hong Kong slipped to -3.4% in the third quarter, further down from -0.4% previously, Savills reported. 

Over the same period, vacancy stood at 10.2%, or 6.5 million square feet with higher rates seen in Kowloon East (14.4%, or 1.9 million sq. ft.), and Central (8.3%, or 1.3 million sq. ft.). 

“In some districts vacancy is close to or above GFC levels from 2009,” the October 2022 Office Leasing report read.  

“Set against a background of slowing economic growth and ongoing COVID restrictions, we expect demand to remain lacklustre over the final quarter of the year and vacancy can be expected to tick up into next year as new supply is added to the Market.”

Read more: Grade A office market posts negative net absorption in August 

Savills expected that demand will emerge modestly from mainland China businesses as well as from business across various areas, such as ESG firms, FinTech, and cryptos amongst others.

“We are still seeing take-up from serviced office operators but after aggressive growth since 2021 this has fallen back recently.”