Net take-up in office market slows to 15,500 sq ft in 2Q14

Demand for Grade A space was lacking.

Weak demand for Grade A office space contributed to net take-up in 2Q14 slowing to 15,500 sq ft in 2Q14, down from 303,200 sq ft in 1Q14.

According to a research report from JLL, buoyed by smaller requirements (i.e. less than 5,000 sq ft) from the banking and finance sector and new PRC set-ups, net take-up in Central amounted to a market leading 79,600 sq ft.

Meanwhile, Beijing-based UCF Corporate Financial Group leased a whole floor in Two Pacific Place in Admiralty to accommodate expansion plans.

Outside of Central, Wanchai/Causeway Bay and Hong Kong East were the only two office submarkets to record net withdrawals.

Here’s more from JLL:

With vacancy remaining tight in both submarkets – less than 2% in Hong Kong East – there was little room to cater for tenant expansion.

Padded by sales transactions in strata-titled buildings, net take-up amounted to 24,700 sq ft in Kowloon East.

There was no new Grade A office supply completed in 2Q14.

A commercial site in Tsimshatsui was released by the government for sale via public tender in June.

Located at 15 Middle Road, the site covers an area of 28,309 sq ft and has a maximum buildable GFA of about 339,700 sq ft.

The purchaser is required to build a public car park with no less than 315 car parking spaces within the building.