In Focus
COMMERCIAL PROPERTY | Staff Reporter, Hong Kong

Hong Kong's Grade A office market "relatively subdued" in December

Activity was underpinned by relocations.

The office leasing market was relatively subdued in December ahead of the year-end holiday season, according to JLL.

With availability in traditional core area markets remaining tight, leasing activity was largely focused in non-core office areas such as Quarry Bay. Activity was mainly underpinned by relocation and consolidation requirements, with net take-up amounting to 140,500 sq ft for the month.

In Central, several whole floor lease expiries contributed to a net withdrawal of 49,800 sq ft, the largest monthly contraction in the past two years. Still, rents advanced 0.4% m-o-m in December as landlords, especially those in the mid-range of the market, pushed rents higher against the tight vacancy environment.

Here's more from JLL:

The opening of the MTR South Island Line is spurring a fresh round of tenant decentralisation to the emerging Wong Chuk Hang office market on the south side of Hong Kong Island.

41 Heung Yip Road, in particular, has been drawing considerable interest with several prospective tenants negotiating multiple floors within the building. With the new MTR line now in operation, travelling time between Central and Wong Chuk Hang has been reduced to just 15 minutes.

Investment appetite for office properties in Central remained intact given sustained rental growth. Coupled with limited availability of stock for sale, new record highs were achieved in a handful of buildings, in terms of unit price.

A small unit at Far East Finance Centre was sold for HKD 50.0 million or HKD 38,203 per sq ft, setting a new benchmark for the city.

Under the government’s latest land sale programme released in December, three commercial development sites with the potential to yield 2.9 million sq ft of office floor space will be made available for sale in 1Q17.

Among these will be the Murray Road Multi-storey Car Park site, which is expected to draw significant interest, being the first commercial development site in Central to be offered for sale via tender in the past 20 years.

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