＜HK Home＞JLL: HK Overall Grade A Office Vacancy Rate Elevates to 13.5% in May

　　The overall vacancy rate of Hong Kong's Grade A office market rose to 13.5% at the end of May, mainly due to the completion of new commercial buildings, according to the report “Hong Kong Property Market Monitor” released by Jones Lang LaSalle (JLL) today (26 June).

　　Two new commercial building projects, Cheung Kong Centre II in Central and 350 Kwun Tong Road, were completed in May. The overall Grade A office market recorded a net take-up of 21,200 square feet in the same month, partly due to the completion of new projects. However, the new supply also pushed the vacancy rates in Central and Kowloon East to 12% and 18.5% respectively.

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　　On the contrary, the vacancy rates in Wan Chai / Causeway Bay and Island East dropped by 0.2 and 0.1 ppts respectively as at end-May. On the leasing front, the insurance sector continued to expand, with new leasing transactions recorded in May including AIA's expansion into Tower 2 of The Gateway in Tsim Sha Tsui, taking up a full-floor lease totalling 18,400 square feet.

　　Sam Gourlay, JLL's Head of Office Leasing Advisory in Hong Kong Island, said the office leasing market continues to be most active with insurance companies. Although new supply has pushed up the office vacancy rate, it will gradually be absorbed by the market as many tenants look for new buildings to upgrade their office space while rents have come down significantly.

　　Cathie Chung, Senior Director of Research at JLL, noted that in May, actual rents in the overall market fell by 0.8% MoM, the 25th consecutive monthly decline since May 2022. Among the major regional markets, rents in Central and Island East fell by 1.3% and 0.8% respectively, while rents in Tsim Sha Tsui and Kowloon East dropped by 0.5% and 0.9% respectively.

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