Monthly rent in Admiralty fell 9.4% to $105.5 psf.

Leasing demand for Grade-A offices in Kowloon fell in August asofficetenants kept their outlook and business plans conservative amidst the ongoing social unrest, JLL reported.

Amongst districts, Admiralty recorded the largest monthly rental decline with a 9.4% YoY fall to $105.5 psf. Monthly office rental for Kowloon East slipped 3.4% YoY to $31.8 psf. Most of the deals recorded in Kowloon East were less than 3,000 sqft, with demand mainly from the sourcing and electronics sectors, said JLL.

Also read: Grade-A office rents in Hong Kong Island up 1.2% in June

“With market conditions remaining uncertain, many firms are taking a long and hard look at their medium- to long-term plans on real estate costs, in addition to the short-term solutions of space optimisation and restacking,” the report stated.

Although the number of deals closed in August was on par with that in July, the negotiations for these deals started three to six months earlier, reflecting the attitude of tenants before the social unrest began. “With market sentiment changed since then, tenants have generally adopted a wait-and-see attitude, causing a drop in the number of tenants requesting inspections. For example, some banks that were recently licensed for virtual banking have put their expansion plans on hold,” noted JLL.