Grade A office rents are seeing their fourth consecutive quarter of decline, while the average vacancy rate has hit nearly 6%.

• Overall office rents are down by 11% from their peak in the second quarter of 2019.
• Wanchai/Causeway Bay recorded the largest decrease (-5.7%) among all office sub-markets.
• A narrowing rental gap between Central and other districts may slow decentralization.
• Co-working operators are downsizing while IWG continues their expansion in Hong Kong.
• Landlords are more willing to lower their rental expectations to keep tenants and fill vacancies.
• The vacancy rate in core areas (Central, Wanchai/Causeway Bay & Tsim Sha Tsui) has more than doubled in a year, up from 2.2% in June 2019 to 5.5% in June 2020.
• Paul Chan, the Financial Secretary, has suggested that the unemployment rate may remain near current levels over the remainder of 2020, suggesting that the vacancy rate is unlikely to fall this year, given the positive correlation between the two indicators.