Hong Kong office vacancy rate hits 10.5% in September

This is due to new completions in the month.

According to a JLL report, the overall net absorption was recorded at 157,000 sq ft in September. Flex space operators continue to expand business footprints in core locations. 

The report adds that notably, IWG leased 25,600 sq ft (GFA) at LKF Tower in Central, whereas The Great Room leased a mid-zone floor (21,300 sq ft, LFA) at Cheung Kong Center for expansion. 

Here’s more from JLL:

The overall vacancy rate rose to 10.5% as of end-September, mainly due to new completions during the month, namely AIRSIDE in Kai Tak and Boton Technology Innovation Centre in Kwun Tong, in which household appliances manufacturer SEB Asia committed to a mid-zone floor (37,500 sq ft, GFA) at AIRSIDE. The vacancy rate in Central dropped to 8.3%, while Wanchai / Causeway Bay and Tsimshatsui's vacancy rates remained flat. 

Overall net effective rents dropped further by 1.0% m-o-m in September. Among the major office submarkets, rentals in Central and Wanchai / Causeway Bay dropped by 0.4% and 0.1%, respectively, while rents in Hong Kong East registered the largest drop of 1.1%. 

Two major transactions were reported during the month. The Goldin Financial Global Centre in Kowloon Bay was reportedly sold under receivership and New World Development announced the sale of a 51% stake in NKIL 6572 in Cheung Sha Wan for HKD 3.08 billion to an offshore investor.