Grade A office rents drop 6.5% YoY in 4Q23

By 4Q23, average rent stood at $52.9 per sq ft.

Overall Grade A office rents dropped to $52.9 per sq ft in 4Q23, representing a 2.3% decline QoQ and a 6.5% decline YoY, according to Colliers Hong Kong.

The Central Business District (CBD) also experienced a rental decline, with the Central/Admiralty submarket dropping to $93.1 per sq ft in 4Q23, down 2.4% QoQ and 8.2% YoY.

Supported by the insurance sector, Tsim Sha Tsui was the only submarket that saw rental growth in 2023.

Meanwhile, the 2023 net takeup was -976,000 sq ft. 

Last year also saw a record-high vacancy rate of 15.9%, a 1% QoQ increase.

Colliers attributed the weak rental trend in the office market in 2023 to businesses prioritising cost savings over expansion due to slow economic growth and interest rate hikes.