Insurance companies drive leasing demand in HK 

An insurance firm recently leased 53,600 sq ft at AIRSIDE in Kai Tak.

Overall Grade A office market recorded a positive net absorption of 137,000 sq ft in March, JLL reported.

JLL attributed the growth to the realisation of pre-commitments in newly completed projects. One notable transaction is an insurance company leasing an entire floor with a total gross floor area (GFA) of 53,600 sq ft at AIRSIDE in Kai Tak to accommodate growing business demand.

The transaction also reflects the active role of insurance companies in driving leasing demand in Hong Kong, benefiting from the return of mainland tourists.

Meanwhile, the completion of Six Pacific Place in Wan Chai and Viva Place in Wong Chuk Hang contributed to a 13.1% increase in the overall vacancy rate in March.

Additionally, vacancies in Central and Wan Chai/Causeway Bay slightly rose by 0.1 and 0.3 percentage points, respectively, whilst the vacancy rate in Kowloon East dropped by 0.5 percentage points.

"The leasing market is witnessing some marginal improvements. In the first quarter of 2024, 38% of new lettings were above 20,000 sq ft, compared to only 22% in 1Q23. The leasing volume for transactions between 20,000 to 50,000 sq ft increased by under 5% in the first quarter of 2024. Insurance companies, financial institutions, and luxury brands are the most active occupiers in the office leasing market. We expect larger new lettings to continue into the second quarter of 2024," said Alex Barnes, Managing Director and Head of Office Leasing Advisory at JLL in Hong Kong.