Office leasing activity in Kowloon, Hong Kong to rebound by year-end

Leasing demand in July was focused on smaller transactions.

Similar with the trends on Hong Kong Island, there was a slowdown in tenant movement within the Kowloon office leasing market. 

According to Knight Frank, new leasing demand focused on smaller transactions of 4,500 sq ft or below, at an average rent of HK$26.9 per sq ft. Sizeable transactions of over 30,000 sq ft remained rare. 

Here’s more from Knight Frank:

This was a continuation of the trend in the past quarter, but again like the Hong Kong Island market, an occasional large relocation transaction drew most of the market attention. In July, U.S. toy company Hasbro confirmed its relocation from Harbour City to 78,000 sq ft of space in Hang Seng Tower in Kowloon Bay. This relocation suggests that there are still tenants looking for specific types of opportunities in the prevailing tenant’s market – in this case, a long fixed-lease term, and free fit-out premises at a competitive rent.

Looking ahead, the Kowloon market will continue to behave similarly to the Hong Kong Island market. Tenants will continue to pursue unique market opportunities to drive new leasing demand. The size optimisation trend, driven by the adoption of agile working and WFH will add support for this trend. A gradual rebound in leasing activity in Kowloon is expected by the end of the year.