Grade A office vacancy rate rises to 12.1% in December 2022

New completions pushed the vacancy rate up.

The vacancy rate of Grade A offices rose to 12.1% by the end of last year on the back of new completions in non-core areas, JLL reported.

Based on JLL’s latest Hong Kong Property Market Monitor, vacancy rates increased across all submarkets.

In Central and Wanchai/Causeway Bay, the vacancy rate marginally rose to 8.8% (vs 8.7%) and 10.2% (vs 10.1%), respectively.

Meanwhile, vacancy rates increased to 11.1% in Hong Kong East, 11.0% in  Tsim Sha Tsui, and 19.5% in Kowloon East. 

As vacancy rose, net effective rents dropped by 0.4% MoM, whilst net absorption was -116,900 sq ft.

Whilst 2022 ended negatively, JLL believes the office market will see an obvious improvement in the second half of 2023.

"Leasing sentiment in the retail market remained soft in December last year and transactions in core areas were mainly short-term leases. However, Hong Kong's retail market will see the most noticeable improvement in the property sector since mainland China has reopened its borders. The leasing activities in the retail market will rebound this year, and market interest in core areas is expected to return,” Nelson Wong, Executive Director of Research at JLL, said.