Premium Central office rents slipped 11% from June to October

Retail firms posted more lease disposition cases as many cut costs.

Premium Central office spaces were hit the hardest by social unrest and trade conflict, posting an 11% drop in rents in June to October, according to Knight Frank.

Monthly grade-A office rents in the district fell 8.4% MoM and 15.5% YoY to $168.2 psf in October, the worst in the city for the month.

Amongst industries, retail companies posted more lease disposition cases as many adopted cost control measures. According to the Census & Statistics Department, retail sales slipped 18.3% YoY to $29.9b in September.

Still, some multinational financial institutions, like US-based Citadel Investment Group renting a 24,000sqft on the 42nd floor at Two IFC for expansion, are still found to take up space in the city.

More lease disposition cases were also observed in Kowloon, and most of the deals during the month were for spaces smaller than 3,000 sqft and for below $25 psf per month. Demand mainly came from the sourcing sector.

“Leasing activity is expected to remain slow in the coming two to three months, especially since this the traditional low season,” the report wrote.

A separate report by JLL found that office rents dropped by 1.6% MoM for the same month, the sharpest decline in over a decade.