Hong Kong Figures - Office Q4 2023

January 17, 2024 5 Minute Read

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  • Leasing momentum pulled back to its usual seasonally slow momentum in Q4 2023, with gross leasing volume falling by 35% q-o-q to 815,200 sq. ft.. This brought full-year leasing volume up to 4.1 million sq. ft., representing growth of 9.3% y-o-y. The October-December quarter saw leasing activity led by relocation demand, with tenants continuing to seek fully-fitted premises to minimise CapEx. However, most companies kept expansion plans on hold. 
  • Net absorption registered 318,600 sq. ft. thanks to relocation and upgrading demand in Kowloon and earlier pre-commitments to the newly completed 83 King Lam Street in Cheung Sha Wan. Full-year net absorption stayed positive for a second consecutive year, reaching 216,000 sq. ft.
  • Despite delays to a few new projects, slow pre-leasing activity in the 1.3 million sq. ft. of new supply added in 2023 ensured vacancy reached a record high 14.3 million sq. ft. by year’s end. Overall vacancy rose to an all-time high of 16.4%, growing by 1.1-ppt over the 12 months.
  • The vacancy overhang led to a 2.3% q-o-q fall in rents, bringing the full-year decline to 6.0%. Core Central and Hong Kong East saw the biggest falls, registering 3.4% q-o-q and 3.1% q-o-q, respectively. Rents fell 6.3% y-o-y and 7.7% y-o-y, respectively, over the full-year.