Negative absorption seen in Grade A office market in January
JLL linked this to the Chinese New Year, traditionally a low season.
The Grade A office market recorded a negative absorption of 16,900 square feet in January, JLL reported.
The January performance is linked to the Chinese New Year, which is considered as a low season for the office leasing market.
The overall vacancy rate went up to 12.2% by the end of January. It rose marginally in Central and Wanchai/Causeway Bay to 8.9% and 10.3%, respectively; but inched down to 11% in Hong Kong East from 11.1%.
Read more: Grade A office vacancy rate rises to 12.1% in December 2022
"We received more leasing inquiries from insurance and financial institutions. Their businesses are expected to benefit from the reopening of mainland China,” Alex Barnes, Managing Director at JLL in Hong Kong.
“Hong Kong’s office market will see a transacted improvement in the second half of this year.”
The overall net effective rents dropped by 0.2% m-o-m in January. Among the major office submarkets, rentals in Central and Wanchai/ Causeway Bay both dropped by 0.2%, while Tsimshatsui's rent remained stable.
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