HK Grade A office in Q1 2015 reaches 300,800 sq. ft. of net absorption

There was solid leasing activity.

Leasing activity in the Hong Kong Grade A office market strengthened this quarter, with 300,800 sq. ft. (NFA) of net absorption recorded in Q1 2015.

According to a research note from CBRE, constituent changes in the CBRE Hong Kong Grade A Office stock basket for the calculation of stock and vacancy gave net take-up a one-off boost of 217,300 sq. ft. compared with the reported figure in Q4 2014.

On a like-for-like basis (ie. a quarter-over-quarter [q-o-q] comparison based on the revamped stock basket), overall net-take up increased by 97,300 sq. ft. q-o-q in Q1 2015.

Around 40% (119,200 sq. ft.) of net absorption was realised on Hong Kong Island, while Kowloon and the New Territories accounted for 31% (93,300 sq. ft.) and 29% (88,200 sq. ft.), respectively.

Here's more from CBRE:

Activity on Hong Kong Island was mainly driven by the banking and finance sector in and around the Central CBD.

A few large spaces were leased to banks, wealth management firms and insurance companies.

Banks were also active in Kowloon, taking up spaces in Tsim Sha Tsui and Kowloon East.

No new stock was completed this quarter. Overall vacancy stood at 3.9%, down from 4.1% three months ago (based on the revamped stock basket). Improved leasing activity and lower vacancy combined to push up overall Hong Kong rents by 1.8% q-o-q.