The dynamics of Hong Kong's Grade A office leasing market have shifted, with the education sector gaining prominence as an active participant. Despite a negative net absorption reported in March, reaching 63,100 square feet, activity levels remain robust. This contraction is attributed to spaces re-entering the market after prior consolidations and relocations. Notably, vacancy rates across key business districts maintained stability, albeit with slight variations.

While overall vacancy rates climbed to 13.7% due to stock adjustments, certain areas witnessed improvements. Central and Hong Kong East maintained steady vacancies, whereas Wanchai/Causeway Bay and Tsim Sha Tsui saw reductions by 0.1 and 0.6 percentage points respectively. Conversely, Kowloon East experienced a rise in vacancy rates to 21.3%, influenced by the completion of THE CENDAS in Kowloon Bay. Illustrating the education sector’s involvement, Tung Wah College expanded its footprint by leasing a floor at Kowloon Commerce Centre Tower A.

Rent trends indicate ongoing challenges, with Grade A office rents declining last month by 0.6%. Areas such as Central and Wanchai/Causeway Bay registered modest decreases of 0.2% and 0.4% respectively. Hong Kong East faced the steepest drop at 1.2%, while Kowloon East saw a marginal decline of 0.2%. The resilience shown by the education sector amidst these fluctuations underscores the importance of diversifying tenant bases within the commercial real estate landscape, fostering stability and growth potential for the future.