Vacancy rates in Central and Kowloon East hit 2.3% and 10.3%.
Vacancy levels in Hong Kong's Grade A office market rose for the third consecutive month to 4.4% in January from 4.2% in December 2018 as returning space from expring leases outweighed demand, according to JLL’s property market monitor report.
The Grade A office market recorded a negative net absorption of 178,200 sqft in January, pushing up vacancy rates in Central and Kowloon East to 2.3% and 10.3% respectively.
Central's rising vacancy rates are set to provide much needed room for existing tenants to grow, particularly banking and finance firms seeking to expand and upgrade their offices.
The report noted how online securities trading platform provider Aevitas Securities was said to have leased 13,300 sqft at Cheung Kong Centre to accommodate its expansion plans, whilst Folger Hill Asset Management upgraded its offices by leasing 7,600 sqft at Man Yee Building.
“Tsim Sha Tsui posted the fastest growth for the second consecutive month, with rents rising 1% MoM against the tightest vacancy amongst the three core-area office precincts” JLL’s head of markets Alex Barnes said in a statement.
An estimated 2.4 million sqft of office floor space is expected to return to the market in 2019, which may drag on landlords’ abilities to drive rental growth.
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