Office rents up 0.3% to $71.6 psf in October

The expansion of PRC companies in Central drove rents upward.

Office rents increased 0.3% MoM to an average of $71.6 per square feet in October, according to JLL’s Property Market Monitor.

Net absorption in overall office market amounted to 155,600 square feet as robust leasing demand particularly from the expansion of Chinese companies in Central, growing requirements of co-working spaces and ongoing tenant decentralisation continue to drive office leasing market rents upward while slashing vacancy rates.

JLL notes that overall vacancy rate dipped to 4.9% in October with the highly-sought after Central submarket posting 1.8% vacancy rate.

This is also the case for Wanchai whose vacancy rate similarly fell to 2.4%; Hong Kong East at 3.7%; and Kowloon East at 10.9%.

Only Tsimshatsui posted a marginal increase in its vacancy rate at 3.5% in October.

“Expansion and new set-up requirements from co-working space operators bolstered office demand in Central. Demand is also increasing from PRC business, which will continue to push rents in trophy buildings into 2018,” said JLL Head of Hong Kong Markets Alex Barnes.