Office space negotiations more active as overall vacancy rate drops in March

This is the first drop since May 2022, JLL said.

Border reopening led to the first decline in the vacancy rate of Grade A offices, which fell 12% in March 2023, JLL said in its report.

This is the first decline in 10 months, JLL also said.

The Grade A offices' overall vacancy rate edged down from 12.2% at the end of February to 12.0% at the end of March. 

The vacancy rate in Wanchai / Causeway Bay and Kowloon East fell to 9.6% and 19.3%, respectively, whilst Central's vacancy rate remained flat.

Alex Barnes, managing director at JLL in Hong Kong, said inspections and negotiations for office space are livelier since the border reopening. 

“The office market also recorded some sizable leasing transactions last month, which helped to reduce the vacancy rate of the overall market. It also helped the market record a positive net absorption of 203,900 sq ft in March,” said Barnes.

Amongst a handful of new lettings, MUFG bank leased two floors with a total gross floor area of 86,800 sq ft at AIRSIDE in Kai Tak to consolidate its offices in Central and Quarry Bay.