Demand for office space in Hong Kong cools by the most in five months, but rents edge higher
- Office lettings dropped by 30 per cent month on month in March
- Overall rents rose by 0.3 per cent last month
New office lease activity in Hong Kong dropped by nearly a third in March – the most in five months – amid softening demand from mainland Chinese companies, JLL’s latest report showed.
The 30 per cent drop in office lettings pushed up the overall available space to 95,700 square feet or 4.8 per cent, up from 4.7 per cent recorded in February.
“If we are talking about month on month basis, it is the biggest drop since November 2018 when it dropped 55 per cent,” said Denis Ma, head of research at JLL. “We anticipate the slowdown in leasing demand to remain the major theme in 2019 amid sustained uncertainties surrounding the trade war between China and the US, and a slowing mainland Chinese economy.”
Rents, however, held up, rising 0.3 per cent month on month. They were given a boost by grade A office rents in Central, which increased by 0.5 per cent.
Ma said the uptick in rents was also the slowest since November 2018.
He said that although the vacancy rate remains below critical levels, landlords were still not considering lowering rents.