Hong Kong Grade A office vacancy falls to 12.4% in September, lowest since May 2023

Hong Kong's Grade A office vacancy rate dropped to 12.4 per cent in September, the lowest since May 2023, driven by a fifth straight monthly decline in Central and Tsim Sha Tsui. Average citywide rents rose 0.7 per cent month on month, with Central leading at a 1.6 per cent increase, while Kowloon E

Hong Kong’s Grade A office vacancy fell to its lowest level since May 2023 in September, with leasing in the city’s prime Central district and the Tsim Sha Tsui commercial hub driving a fifth straight monthly decline, according to JLL. The citywide vacancy rate edged down 0.1 points to 12.4 per cent, the consultancy said Monday in a release. Average office rents across the city’s main commercial hubs rose 0.7 per cent from August, led by a 1.6 per cent increase in Central.

Tenants took up 245,800 square feet (22,836 square metres) more office space than they gave back during September, although net uptake moderated from the previous month as demand remained concentrated in prime locations. “Vacancy of top-tier office buildings continued to decline as leasing activities are focused on these buildings in Central, Tsim Sha Tsui and increasingly the new supply in West Kowloon,” said Sam Gourlay, JLL’s head of office leasing advisory for Hong Kong.

Central recorded the largest rise in occupancy among Hong Kong’s major office districts, with vacancy falling 0.6 points to 7.2 per cent at the end of September from 7.8 per cent a month earlier. Vacancy in Tsim Sha Tsui declined to 6.2 per cent from 6.4 per cent, leaving the Kowloon district with the lowest proportion of empty space among the five major submarkets tracked by JLL. Average monthly office rents citywide stood at HK$49.10 (US$6.26) per square foot.

September’s leasing activity included GF Securities taking a linked floor spanning 78,872 square feet at Sun Hung Kai Properties’ International Gateway Centre in West Kowloon, with the mainland brokerage relocating from GF Tower in Wan Chai. JLL described the deal as an upgrade transaction reflecting West Kowloon’s growing appeal to securities firms, with proximity to the high-speed rail station offering convenient access to wealthy clients from mainland China.

The move adds to a series of financial sector commitments to the precinct, after JP Morgan agreed to lease around 250,000 square feet at Sun Hung Kai’s Artist Square Towers under a 10-year deal, as Mingtiandi reported in March. The US investment bank plans to relocate its Kowloon office from The Quayside in Kwun Tong in the second half of 2028. JP Morgan’s commitment followed Sun Hung Kai’s handover of a 14-storey building at International Gateway Centre to Swiss lender UBS in February.

The improving headline figures masked weaker conditions elsewhere, with vacancy rising in Wan Chai/Causeway Bay, Hong Kong East and Kowloon East during September despite the gains in Central and Tsim Sha Tsui, according to JLL’s monthly Market Dynamics report. Apart from Central’s 1.6 per cent rise, Grade A office rents in key submarkets were largely stable with the exception of Kowloon East, where they fell 0.6 per cent from August, said JLL senior director of research Cathie Chung.

Vacancy in Kowloon East rose to 19.7 per cent in September from 19.5 per cent, leaving nearly one-fifth of the area’s Grade A office stock empty. Occupancy fell most steeply in Wan Chai/Causeway Bay, with vacancy climbing 0.6 points to 10.3 per cent, while Hong Kong East’s rate rose 0.2 points to 14.3 per cent.