Positive net absorption cheers office market

Hong Kong office market recorded its first positive net absorption since July 2019, reaching 116,300 square feet in May, according to JLL Hong Kong’s latest report.

The overall vacancy rate fell 0.1 percentage points month-on-month to 9.4 percent.

More corporate tenants are opting to upgrade their offices as rents have become more affordable, the real estate consultancy said.

For instance, food delivery company Foodpanda rented two floors at Times Square in Causeway Bay.

The gross leasing volume in Central has improved in recent months, with the vacancy rate in the submarket retreating 0.3 percentage points to 7.2 percent.

While rental growth was recorded during the month, rents in the overall market still declined by 1.4 percent month-on-month as landlords were more willing to lower their asking rents to entice new tenants. Offices in Tsim Sha Tsui experienced the biggest rental decline while rents in Central were more resilient. The average monthly rent was HK$56.3 per sq ft.

In the retail market, leasing volume improved, with a few notable deals recorded. Hong Kong-based luxury goods retailer Dickson Concepts has committed to a six-year lease of a 17,000-sq-ft outlet at CMB Wing Lung Bank Centre in Mongkok for a monthly rent of HK$3 million. However, home sales slipped by 3.3 percent to 7,084 in May, due to a decrease in secondary transactions.

The primary market has been driven by the launches of large-scale projects and sell-through rates were generally well-received, JLL Hong Kong said.

Meanwhile, in the residential market, China Overseas Land and Investment (0688) has released the first price list of One Victoria at Kai Tak, involving 212 units with an average price of HK$22,977 per sq ft after discounts.

The flats are 13 percent cheaper than the first batch of The Henley I, also in Kai Tak.

They range in size from 329 sq ft to 643 sq ft, and include-62 one-bedroom, 126 two-bedroom, and 24 three-bedroom flats. The cheapest flat costs-HK$6.56 million.

One Victoria is expected to open sales in early July. Also expected to open sales next month are Mount Arcadia in Sha Tin and 42 Tung St in Sheung Wan.

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