Hong Kong office market rebounds in April

The leasing demand is mainly driven by upgrading activities.

The overall Grade A office leasing market recorded a positive net absorption of 39,700 sq ft in April after the negative net absorption recorded in March, according to JLL's latest Hong Kong Monthly Market Dynamics.

The leasing demand is mainly driven by upgrading activities.

"We observed an uptick in leasing momentum in certain sectors, particularly finance and insurance as well as education. These industries are actively securing office space. In addition, upgrading continues to be the major trend as ample new supply is attracting the tenants to relocate to higher quality spaces which better serve their business and talent needs,” Alex Barnes, Managing Director at JLL in Hong Kong said.

The overall office vacancy rate held steady at 13.7% last month, with divergent performances across submarkets. Central and Hong Kong East experienced increases in vacancies, rising to 11.7% and 14.0%, respectively, mainly due to available space resulting from prior consolidations and relocations. In contrast, Wanchai/Causeway Bay, Tsimshatsui, and Kowloon East recorded decreases in vacancies of 0.3, 0.4, and 0.3 percentage points, respectively.

Despite stable office vacancy rates, rents continued their downward trend in April, recording a slight m-o-m decrease of 0.5%.

Central experienced a modest decline of 0.4%, whilst other key submarkets, including Wanchai/Causeway Bay, Hong Kong East, and Kowloon East, saw more pronounced drops of 0.6% each.

This latest dip marks the 36th consecutive month of rental declines since May 2022.