Hong Kong Grade A Office Vacancy Falls to 31-Month Low in July
On.cc · 2 SOURCESabout 3 hours ago2 MIN
Summary
Hong Kong's Grade A office market showed further signs of recovery in July 2024, with the overall vacancy rate declining to 12.8% - a 31-month low and a third consecutive monthly drop. Central led the improvement among commercial districts, recording the steepest vacancy decline of 0.8 percentage points to reach 8%, while fund companies have dramatically reversed their preference for Hong Kong as an Asian base. Average office rent rose 0.8% month-on-month, supported by sustained net absorption of approximately 313,000 square feet and growing demand from financial institutions.
Key Points
- Overall Grade A office vacancy dropped to 12.8% in July, reaching the level last seen in December 2023 and marking a 31-month low
- Central vacancy fell 0.8 percentage points month-on-month to 8%, the lowest in over four years and the steepest decline among all districts
- Tsim Sha Tsui maintained the lowest vacancy among major districts at 6.7%, while Wan Chai/Causeway Bay stood at 9.8% and Kowloon East at 19.8%
- Fund companies have shifted decisively toward Hong Kong, with over 70% of newly established funds choosing Hong Kong in 2024 versus just 20% in 2025 projections
- Average Grade A office rent reached HK$48.4 per square foot, rising 0.8% month-on-month with Central up 1.5% and Tsim Sha Tsui up 0.5%
Why It Matters
The sustained improvement in Hong Kong's office market signals growing confidence among international fund managers in the city's role as a regional financial hub. As more fund companies establish their Asian bases in Hong Kong, demand from financial institutions and professional service firms will continue supporting rental growth and reducing vacancy, particularly in prime Central locations.
The sustained improvement in Hong Kong's office market signals growing confidence among international fund managers in the city's role as a regional financial hub. As more fund companies establish their Asian bases in Hong Kong, demand from financial institutions and professional service firms will continue supporting rental growth and reducing vacancy, particularly in prime Central locations.