JLL: Rental prices of Grade A office spaces in Hong Kong's Central district have increased by 3.5% over the first two months.

Jones Lang LaSalle (JLL) released the "Hong Kong Real Estate Market Observation" report, stating that the leasing market for Central office buildings has improved the overall vacancy rate and rental prices for Grade A office buildings. In the first two months of this year, rents for Grade A office buildings in Central have increased by a cumulative 3.5%. The report highlights that after rental increases of 1.2% in January and 2.3% in February, rents for Grade A office buildings in Central have already risen by 3.5% in the first two months of the year, leading to a 1.1% monthly increase in overall Grade A office building rents in February. Vacancy rates for Central and Wan Chai/Causeway Bay have also improved for three consecutive months, bringing the overall vacancy rate down to 13.4% by the end of February. The vacancy rate in Central has dropped to 9.9%. Alex Barnes, Managing Director of Jones Lang LaSalle (JLL) in Hong Kong, Macau, and Taiwan, stated that as the leasing demand in the office market is mainly driven by the banking industry, these tenants prefer to rent new office buildings in core commercial areas. As a result, only a few areas have seen improvements in the leasing market. This trend is expected to continue this year, while non-core commercial areas such as Kowloon East will continue to face pressure. Notable transactions include Standard Chartered Bank leasing 21,400 square feet at Island East One in Causeway Bay, and ING Bank leasing 15,600 square feet at One IGC in West Kowloon. Linda Chung, Senior Director of Research at Jones Lang LaSalle (JLL), noted that the Grade A office leasing market recorded a positive net absorption of 143,700 square feet in February. Apart from improvements in the vacancy rates in Central and Wan Chai/Causeway Bay, vacancy rates in other sub-markets have generally remained stable or slightly increased, with Tsim Sha Tsui and East Kowloon seeing monthly increases of 0.3 and 0.1 percentage points, respectively.