Central office crunch fuels Wan Chai and Causeway Bay leasing surge

The net take-up hit its highest monthly level in more than two years, JLL says.

Demand for premium office space in Central is spilling into Wan Chai and Causeway Bay, lifting leasing activity in the district to its highest monthly level in more than two years, according to JLL.

The property consultancy said net take-up in Wan Chai and Causeway Bay reached 98,600 square feet (sq ft) in May, the strongest monthly performance since April 2024.

Vacancy in the district fell 0.6 percentage points to 9.8% at the end of May, the lowest level in 10 months.

"We are beginning to see spillover demand as premium offices in Central approach full occupancy," said Sam Gourlay, head of office leasing advisory at JLL Hong Kong.

"This has helped drive the overall office vacancy rate down to 13.3% as at end-May, although occupiers are likely to remain focused on newer or higher-quality buildings,” he added.

Across Hong Kong, the Grade A office market recorded positive net absorption of 205,000 sq ft in May, supported by continued demand from securities firms.

Amongst the month's largest transactions, CITIC Securities leased an entire floor of about 18,000 sq ft at CITIC Tower in Admiralty, whilst Ping An Securities leased approximately 14,900 sq ft at The Center in Central.

Cathie Chung, senior director of research at JLL, said Central continued to lead the rental recovery in May.

"Central remained the primary driver of rental growth, with rents rising by 0.7% month-on-month, whilst Wan Chai/Causeway Bay recorded a more modest increase of 0.3%," Chung said.

Overall Grade A office vacancy in Hong Kong declined to 13.3% at the end of May from 13.5% a month earlier.

Central's vacancy rate remained unchanged at 9.2%, whilst Wan Chai and Causeway Bay recorded the largest improvement amongst the major office submarkets tracked by JLL.