Central Commercial Building absorbed a total of 6 months

China’s commercial building rental demand has a downward trend. Jones Lang LaSalle published the “Hong Kong Property Market Watch” report yesterday, saying that the Central Grade A commercial rental market has recorded negative absorption for six consecutive months since November last year. In a single month, the negative absorption of 14.5 million square feet in the commercial market in Central in April was estimated to be affected by the reduced leasing demand of Chinese-funded enterprises and the continued migration of tenants from the core area.

Bao Yali, head of the commercial department of Jones Lang LaSalle, said that the main focus of the new lease transaction in Central was from the expansion needs of banks, financial institutions and law firms in the region. Among them, Gaoying International Law Firm leased 13,100 floors of the Duke Building for expansion. Despite the slowdown in demand for commercial buildings in Central, the vacancy rate remained at a low of 2.2%. In April, rents rose by 0.2% to an average of $103 per square foot.

As for the overall market conditions, the new leased floor was increased by 71% month-on-month and concentrated on Hong Kong Island East. The bank believes that the main reason is that tenants continue to identify locations where they can save on rental expenses to open offices and expand. The SFC has leased a site of 182,700 square feet from the Island East Centre in Quarry Bay. It is planned to be relocated and expanded from Central.

Ma Anping, head of the Jones Lang Lai Research Department, added that the weak demand for office buildings has slowed the rent increase and the vacancy rate in recent months. However, due to the tight floor space available for rent in the core business district, the annual rental of commercial buildings is expected to increase by up to 5%.