Office rents extend climb after rising 2.4% in Q2

Wanchai/Causeway Bay dethroned Central as rental growth driver.

Hong Kong’s office market maintained its positive momentum from last year after grade A office rents across all districts rose 2.4% YoY in Q2, according to real estate consultant Savills.

Also read: Mainland firms are not letting up on Hong Kong's office market in Q2

Wanchai/Causeway Bay have dethroned Central as the main growth driver of the city’s positive rental growth after leasing costs in the district rose 2.8% in Q2 compared to Central’s 2.5% rental increase.

Tsim Sha Tsui rents rose 2.7% whilst Kowloon West also maintained its positive growth for three straight quarters after rents rose 2.1%.District rents for Island East and Kowloon East rents also inched up 1.6% and 0.9% respectively.

Heated takeup from Mainland firms and co-working operators led to tighter vacancy rates from 3.6% in Q3 2017 to 2.8% in Q2 after a net take-up of 190,000 sq ft.

Also read: Flexible workspaces represent 1.2% of Hong Kong office space 

Notable new lettings in Q2 include DBS leasing 197,000 sq ft at Kwun Tong’s Two Harbour Square and Starbucks leasing over 35,00 sq ft at Millennium City 5 - BEA Tower.