Hong Kong Figures - Office Q1 2023

April 14, 2023

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  • Office leasing sentiment improved in Q1 2023 following the full border re-opening with China and the gradual recovery of Hong Kong’s economic momentum. Gross leasing volume increased by 40% q-o-q to 1.1 million sq. ft, from the preceding quarter’s low base. However, new and expansionary demand remained thin.
  • Net absorption stayed positive for a third consecutive quarter, registering 135,900 sq. ft., the bulk of which was contributed by Kowloon. Net absorption on Hong Kong Island was negative. Flight-to-quality leasing activity drove relocation in decentralised areas.
  • With no new supply completed this quarter, positive net absorption ensured vacancy fell 0.2-ppt to 15.1%. While this marked the first decline in vacancy since Q4 2018, total vacant space remains substantial, at 12.9 million sq. ft.