Overall Grade A office rents rise 0.9% m-o-m in August, driven by stronger growth in Central
Key Takeaway:
- As the government advances plans to strengthen Hong Kong’s position as an international education hub, the education sector continues to expand its presence in the office leasing market, supporting demand in non-core business districts.
- Overall Grade A office rents rose 0.9% m-o-m in August, driven by stronger rental growth in Central, where rents increased 1.5%.
- Overall vacancy rates improved modestly, declining by 0.3 ppts m-o-m to 12.5%.
As the government advances plans to strengthen Hong Kong’s position as an international education hub, the education sector turned active in the office leasing market, supporting demand in non-core business districts, according to JLL’s latest Hong Kong Monthly Market Dynamics released today.
Among notable transactions, HKUST expanded its back-office footprint at Manulife Financial Centre Tower B in Kwun Tong by 24,000 sq ft. Meanwhile, CUHK reportedly leased six floors at Grand Central Plaza in Shatin, comprising a total gross floor area of 113,000 sq ft, for teaching and administrative purposes.
Alex Barnes, Co-CEO at JLL in Greater China, said:
“Leasing activity from the education sector remains modest relative to other industries, but it has the potential to provide incremental support for office demand in non-core business districts. As greater clarity emerges following the Policy Address on the allocation of land and the positioning of university towns in the Northern Metropolis, we expect universities and student accommodation investors to become increasingly active in both the office and retail leasing, as well as the investment markets.”
Overall vacancy rates improved modestly in August, declining by 0.3 ppts m-o-m to 12.5%. Hong Kong East was the exception, with vacancy rates rising by 1.1 ppts. Meanwhile, Tsimshatsui and Kowloon East improved modestly by falling 0.3 ppts.
Cathie Chung, Senior Director of Research at JLL, added:
“Overall Grade A office rents rose 0.9% m-o-m, driven by stronger rental growth in Central, where rents increased 1.5%. However, the recovery remained uneven, with rental values in Hong Kong East and Kowloon East declining 0.3%.”
