1 in 5 businesses plan to downsize office footprint

Office occupiers are increasingly prioritising cost savings to control overhead costs.

27% of businesses are planning to downsize their office footprint as companies become more cost-conscious, with an appetite for expansion low, according to Colliers.

Because of this rental rates across all submarkets fell in Q2, causing overall Grade A office rent to decline 1.% QoQ June 2024. Central/Admiralty also declined 1.2% QoQ whilst Island East experienced the sharpest drop out of all submarkets, 2.4% QoQ.

Moreover, vacancy climbed to 16.6% in Q2 2024. 

Central/Admiralty witnessed a substantial increase driven by the completion of two major projects, The Henderson and Cheung Kong Center II, with limited tenant precommitments. 

The total vacant Grade A office area has reached 13.8 million sq. ft. NFA, setting a record high by surpassing the previous peak in Q1 2024 by an additional 0.4 million sq. ft.