Vacancy in HK Grade A offices dip 0.2 pp to 15.1% QoQ

But the trend is expected to raise due to companies' cost control policies.

Hong Kong's commercial real estate market recorded a 0.2 percentage point (pp) decrease in its overall vacancies to 15.1% in the first quarter of 2023 from 15.3% in the fourth quarter of 2022.

CBRE, in its market review, stated that the vacancies in Kowloon East's Grade A offices declined 0.8 pp to 21.6% from 22.4%, followed by Tsim Sha Tsui, with a 0.5 pp decrease to 12.9% from 13.4%.

Vacancies in Wanchai and Causeway Bai on Hong Kong Island retained 12.4% quarter over quarter.

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However, vacant Grade A offices in Greater Central increased by 0.4 pp to 8.9% from 8.5%, whilst Hong Kong East saw a 0.2 pp growth to 13.1% from 12.9%. 

Ada Fung, CBRE Hong Kong's Executive Director and Head of Advisory and Transaction Services said that with cost control policies from companies are still in effect and new office supply sped up from the pipeline, vacancies in Hong Kong's commercial properties expected to trend higher and ensure pressure on rents for the rest of the year.

Meanwhile, the industry's overall net absorption had a 109.2% increase to 159,000 square feet in the first quarter of the year from 76,100 square feet in the fourth quarter of the last year.

Kowloon East contributed the most, with 152,400 square feet, followed by Tsim Sha Tsui, with 48,600 square feet. But, the net absorption in Greater Central dropped to 77,900 square feet.