Hong Kong office market generates overall net take-up of only 318,700 in 1H14

But it’s an improvement from 2013 overall.

Leasing demand in the Grade A office market remained moderate in the first half of 2014, with overall net take-up amounting to only about 318,700 sq ft. However, it was an improvement from a negative net take-up of 269,000 sq ft in the whole year of 2013.

According to a release from JLL, leasing activity was underpinned by renewals with few tenants willing to spend upfront on relocation costs. Central, meanwhile continued to see signs of a pick-up with net take-up amounting to about 133,000 sq ft, largely supported by expansion and consolidation requirements from the banking and finance sector.

The release also noted that demand in the top-end of the market was surprisingly strong. With Grade A1 office rentals having fallen by around 20% from their 2011 peaks, tenants were able to renew leases below their existing rental levels.

Here’s more from JLL:

Chinese companies actively expanding and upgrading their office requirements to meet their business expansion in Hong Kong contributed to a significant part of the growth in this part of the market.

However, new lettings in Central were still dominated by smaller requirements (i.e. less than 10,000 sq ft).

The finance, insurance, real estate and business services (FIREBS) sector remained the most active driver of leasing demand.

Merchandisers and sourcing companies also played a key role in driving leasing activities in the Kowloon market, while the Information Technology and Telecommunications sector in Hong Kong East and Cyberport was mainly led by requirements from leading technology firms including Facebook, AT&T and Computer & Technology.