Grade A office rent dips 2.5% QoQ in 1Q24

Major submarkets like Island East experienced decline in rents.

Overall Grade A office rent declined by 2.5% QoQ in 1Q24, with major submarkets experiencing wider declines, including Central/Admiralty (-2.6%) and Island East (-2.7%), Colliers reported.

Colliers attributed the decline to corporate offices working on cost optimisation and quality retention. Meanwhile, legal and finance firms and optimistic businesses are refining their CBD footprints. 

Colliers added that there is also a strong market for SMEs seeking spaces under 2,000 sq ft NFA.

For 2024, Colliers expects vacancy rates to rise as new office supply exceeds demand.

Colliers also forecast Grade A office rents to decline by 6% this year, with landlords seen to offer rental incentives to attract and retain tenants. 

Colliers also believe Mainland firms will expand their presence in Hong Kong to capture cooperation opportunities.