Grade A office market logs 189,500 sq. ft. net absorption in July

Overall vacancy rates slightly fell during the period.

Hong Kong’s Grade A office market recorded a positive net absorption of 189,500 square feet (sq. ft.) in July, marking the fourth consecutive month of positive net take-up since April, according to JLL's latest monthly market dynamics.

"Leasing demand continues to be mainly driven by flight-to-quality as tenants capitalise on soft rental rates to upgrade their office spaces,” said Alex Barnes, managing director of JLL in Hong Kong, Macau and Taiwan.

Notably, Shell Hong Kong Limited has leased 12,300 sq. ft. of office space at The Millennity in Kwun Tong, relocating from its previous premises at Landmark East within the same district.

Cathie Chung, senior director of Research at JLL, said there was a slight improvement in overall office vacancy rates, which edged down to 13.4% at the end of July.

“All but one submarket recorded declines in vacancy, with Hong Kong East and Kowloon East improving to 13.4% and 20.2%, respectively. However, Wanchai/Causeway Bay saw a negative net absorption, pushing its vacancy rate up to 9.6%,” she added.

Meanwhile, office rents continue to drop, with rates declining by 0.5% month-on-month in July. Hong Kong East recorded the largest drop at 2.6%, followed by Kowloon East (down 0.7%). Central experienced a slight decrease of 0.2%.