JLL: The overall vacancy rate of Grade A office buildings in Hong Kong fell to 12.8% at the end of July, reaching a new low in 31 months.

Jones Lang LaSalle (JLL) today released its "Hong Kong Property Market Outlook" report, which indicated that the overall vacancy rate of Grade A office buildings declined to 12.8% by the end of July, returning to the level recorded in December 2023, marking a new low in 31 months. The overall office vacancy situation has improved, primarily driven by a decrease in vacancy rates across most submarkets, with Tsim Sha Tsui continuing to maintain a relatively low vacancy level. Central outperformed other major business districts, leading the monthly decline in vacancy rates among all areas. The vacancy rate in the district dropped by 0.8 percentage points to 8% by the end of July, reflecting sustained activity in market leasing transactions. Sam Gourlay, Head of JLL Hong Kong's Commercial Division, stated that the office leasing market in Hong Kong further warmed up in July, recording a net absorption of 313,000 square feet, with financial institutions, banks, and professional service firms remaining the primary drivers of leasing demand. According to discussions between Jones Lang LaSalle (JLL) and clients in the financial sector, there has been a significant change in the site preference for establishing bases in Asia for new funds. In 2025, 70% of newly established funds chose Singapore, 20% chose Hong Kong, and 10% chose Tokyo; however, this year has seen a clear reversal, with over 70% of new funds opting to settle in Hong Kong. In the past month alone, eight out of ten funds have chosen to establish their bases in Hong Kong, and this demand is expected to continue supporting the recovery of the Grade A office market in Central. Senior Director of JLL Research, Zhong Churu, added that overall office rents increased by 0.8% month-on-month in July, mainly driven by rent growth in Central and Tsim Sha Tsui, where rents rose by 1.5% and 0.5%, respectively.