Hong Kong East dislodged Central as the district with the lowest vacancy rate at 1.4%.
Hong Kong’s grade A office vacancy rates continued to tighten from 4.3% in May to 3.9% in July as tenants stepped up their expansion and decentralisation plans, according to real estate consultant JLL.
Vacancy rates in Central let up from 1.4% in May to 1.5% in July although new lettings in the sought-after CBD ballooned by a whopping 109% MoM amidst expansion requirements from banks and financial firms.
This includes the in-house expansion efforts of Oriental Patron which leased out 13,900 sqft at One Exchange Square and Hong Kong Exchanges and Clearing leasing 13,000 sq ft at Two Exchange Square.
With companies shunning Central in favour of more affordable office markets, Hong Kong East emerged as the district with the tightest vacancy rate in July at 1.4% followed closely by Tsimshatsui at 1.5%.
Vacancy levels in Wanchai/Causeway Bay also plunged to a record low of 1.6%, pushing rents up to its fastest pace in three years at 1.5% in July. Meanwhile, vacancy rates at Kowloon East clocked in at 9.6%.
“With availability remaining tight, tenants shifted their attention onto upcoming new office buildings. Notable moves included Fleet Management pre-leasing about 35,900 sq ft at South Island Place in Wong Chuk Hang, expanding out of Wanchai whilst Veolia reportedly pre-leased 20,000 sq ft at One Taikoo Place in Quarry Bay,” JLL added in its report.
Interest for en-bloc office also remained strong in July with Henderson Land and Lai Sun said to have sold 8 Observatory Road development in Tsimshatsui to local investors for $4.1b ($22,404 psf).
Net take-up in the office market hit 250,700 sq ft in July. Rental growth also inched up by 0.8% to an average monthly rent of $74.5 psf.
Photo from Baycrest - Own work, CC BY-SA 2.5
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