(25 October 2018, Hong Kong) Office Rents in Wanchai/Causeway Bay rose by 1.6% m-o-m in September, posting the strongest growth among the major office submarkets for the third consecutive month, according to JLL’s October Property Market Monitor released today. Growth in the submarket was underpinned by an extremely tight vacancy environment that remained at a low of 1.6%, allowing landlords to push rents further higher.
Rents in Central also advanced, up 0.9% m-o-mm with rents in Grade A1 offices growing by 1.4% m-o-m. Grade A office space in Central remained highly sought-after by banking and financial services firms.
Alex Barnes, Head of Markets at JLL, said: “Owing to tenant decentralisation and the realisation of pre-commitments at One Taikoo Place in Quarry Bay, net absorption in the overall market amounted to 740,900 sq. ft. in September. Decentralisation continues to be largely met in recently completed offices in Kowloon East. Tricor, for example, reportedly leased 71,700 sq. ft. in Mapletree Bay Point in Kwun Tong, relocating from offices in Wanchai.”
Denis Ma, Head of Research at JLL, said: “Although office rents continued to rise, investment volume took a hit amid an increasingly uncertain economic outlook and rising interest rates. Nevertheless, strong pricing was still realised in a number of select transactions. Meanwhile, monthly home sales fell by 27.4% m-o-m to 3,500 in August as buying sentiment in residential market tapered against waning market sentiment. Mass residential capital values dropped by 0.4% m-o-m in September, marking the first drop recorded after 27 months of consecutive growth.”
| Grade A Office Vacancy | ||||||
| Period | Overall | Central | Wanchai / Causeway Bay |
Hong Kong East | Tsimshatsui | Kowloon East |
| End-Sep 18 | 4.2% | 1.6% | 1.6% | 1.9% | 1.5% | 9.8% |
| End-Aug 18 | 4.2% | 1.5% | 1.6% | 1.6% | 1.4% | 9.9% |
Source: Research, JLL
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