Grade A office market’s net absorption hits 129,000 in May

It is the eighth consecutive month that the office market had positive take-up.

As demand for office space increases, the Grade A office leasing market posted an overall net absorption of 129,000 square feet, JLL said in its latest property market monitor. 

This marked the eighth consecutive month that the market’s Grade A office reported a positive momentum.

It also noted that the “flight to quality trend” prevailed because tenants are actively seeking to upgrade office space.

“New Grade A office buildings with features and technology that can support tenants' sustainability, health and wellness objectives will have an advantage in attracting tenants,” said Alex Barnes, managing director at JLL.

The vacancy rate in the overall office market declined to 9.3% in May 2022. Per area, it rose slightly to 7.6% in Central whilst Kowloon East reported the highest vacancy rate amongst major office submarkets at 12.6%.

Meanwhile, overall net effective rents declined slightly by 0.2% month-on-month in May 2022. Amongst the major office submarkets, Central’s rents were still flat whilst Hong Kong East experienced the biggest rental decline.

As for the retail market, total retail sales rebounded by 11.7% year-on-year in April “with significant support from the disbursement of consumption vouchers.” 

JLL said retail sales are projected to grow after loosened social distancing measures and the second distribution of consumption vouchers.

READ MORE: Office market logs positive net absorption at 56,200 in March