Office-leasing activity in Hong Kong rose for a fourth straight month in July, chipping away at the elevated vacancy rates that continue to weigh on rents, according to JLL.
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Tenants leased a net 190,000 sq ft of prime office space last month, the property consultancy said on Monday. Among them was Shell Hong Kong, which leased 12,300 sq ft at The Millennity in Kwun Tong, relocating from Landmark East in the same district.
However, grade A office rents continued to fall, declining 0.5 per cent in July from a month earlier despite the improved leasing activity.
“Leasing demand continues to be mainly driven by flight-to-quality, as tenants capitalise on soft rental rates to upgrade their office space,” said Alex Barnes, managing director of JLL in Hong Kong, Macau and Taiwan.
All submarkets except one saw a decline in vacancy rates, JLL said. Kowloon East and Hong Kong East recorded the biggest improvements, with empty space dropping 0.5 percentage points and 0.2 percentage points, respectively, the data showed. The vacancy rates in the Wan Chai-Causeway Bay area, meanwhile, edged up 0.1 percentage points to 9.6 per cent.
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The market absorbed a net of 463,000 sq ft of space from April to July, according to JLL.