Last month, tenants signed leases for approximately 190,000 square feet of top-tier office space, although rental prices decreased by 0.5 percent compared to the previous month, as reported by JLL.

Hong Kong’s office leasing activities increased for the fourth consecutive month in July, gradually reducing the high levels of empty space that still affect rental prices, as reported by JLL.

Last month, tenants signed leases for 190,000 square feet of top-tier office space, according to a real estate consulting firm on Monday. One of these tenants was Shell Hong Kong, which rented 12,300 square feet at
The Millennity
located in Kwun Tong, moving from Landmark East within the same area.

Nevertheless, top-tier office rental prices kept dropping, decreasing by 0.5 percent in July compared to the previous month, even with better lease transactions taking place.

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“The continued leasing interest is largely fueled by a shift towards quality, with occupants taking advantage of lower rent prices to enhance their office facilities,” noted Alex Barnes, Managing Director at JLL in Hong Kong, Macau, and Taiwan.

Only one submarket experienced an increase in vacancy rates, according to JLL. Kowloon East and Hong Kong East showed the most significant reductions, with vacant spaces decreasing by 0.5 percentage points and 0.2 percentage points, respectively, as per the data. The vacancy levels in Wan Chai-
Causeway Bay
region, however, increased by 0.1 percentage points to 9.6 percent.

JLL reports that the market took in an overall amount of 463,000 square feet during the period from April through July.

Even with lower office space availability, rental prices kept declining because property owners provided benefits to draw in and keep occupants, noted Cathie Chung, senior director of research at JLL.

She mentioned that although Kowloon East and Hong Kong East experienced the most significant increases in lease transactions, they also faced the sharpest drops in rental prices during the previous month. “Hong Kong East had the highest decrease of 2.6 percent, followed by a 0.7 percent fall in Kowloon East,” Chung stated.

The central area, which serves as the primary commercial hub of the city, saw a decline in rental prices by 0.2 percent.

Office rental prices in Hong Kong have fallen by over 40 percent from their highest point in 2019, as reported by JLL, with an additional 5 percent drop expected this year.

In the meantime, Colliers mentioned that they have been designated as the exclusive representative by the trustee for the auction of several office spaces amounting to 10,000 square feet located on the 15th floor of the western wing of Shun Tak Centre in Sheung Wan through an open bidding process.

Shun Tak Centre is a top-tier Grade A office building located in Sheung Wan,” stated Andrew Ng, Senior Director of Capital Markets and Investment Services at Colliers Hong Kong. “Its premier position provides immediate access to the Western Harbour Tunnel, linking Hong Kong Island, Kowloon, and the New Territories.

A report published by Colliers last month revealed that 31 percent of local companies have an unfavorable perspective regarding the upcoming year, while just 28 percent maintain an optimistic stance, with the remaining portion taking a neutral position.

The study surveyed 400 office occupants in Hong Kong across different sectors and organizational scales. Carried out from March to May, the research examined near-term business expectations, real estate approaches, and new work environment developments.

The study revealed that over half of the renters aimed to keep their present office space, with 27 percent planning to reduce size and 18 percent looking into growing their premises.

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The original version of this article was published in the South China Morning Post (www.scmp.com), a top-tier news outlet covering developments in China and Asia.

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