Central's office rent grows for 2nd consecutive month
The 0.6% growth was driven by premium office space in the submarket.
Central Hong Kong’s office market saw growth for the second consecutive month, recording an increase of 0.6% to HK$90.3 per square foot (sq ft) in September.
JLL Research said the growth which central’s office market has not seen since May 2019 is a “sign of recovery.”
The improvement in office rentals in the central district was driven by “demand for premium office space in the submarket,” according to JLL’s latest Hong Kong Property Market Monitor.
Whilst vacancy rates in the district also increased to 7.8% by the end of September, the report noted that the amount of surrendered space in the submarket lessened during the month.
This, according to JLL, suggests that the “corporate downsizing trend has slowed down.”
Overall, Hong Kong’s office market recorded negative net absorption of 180,100 sq ft in September with leasing activity buoyed by relocation or consolation.
Net effective rents also dropped by 0.1% m-o-m with an average monthly rent of HK$55.7 per sq ft during the month.
“Most leasing activity involved relocation or consolidation as occupiers continue to reconfigure their real estate plan and seek quality office space,” Alex Barnes, head of agency leasing at JLL, said.
Amongst notable relocations reported for the month was Nike’s move from Kowloon Bay to a 54,000 sq ft (GFA) at the International Trade Tower in Kwun Tong.