One Peking reached full occupancy in June for the first time since 2024.
A surge in leasing by mainland China insurance and wealth management companies is driving down office vacancy rates in Tsimshatsui, Hong Kong.
Growing wealth inflows from mainland China have boosted demand from the insurance sector, helping lower the vacancy rate for Grade A office space in Tsimshatsui to 6.7% at the end of June, according to property consultancy JLL’s latest Hong Kong Monthly Market Dynamics report.
That marks a 0.4 percentage point drop from the previous month and a notable recovery from the district’s peak vacancy rate of 11.2% recorded in September 2022.
Along with Central, Tsimshatsui saw the strongest improvements in both vacancy rates and rents amongst Hong Kong’s major office submarkets.
Alex Barnes, Co-CEO at JLL in Greater China, noted that Tsimshatsui’s vacancy rate has fallen to the lowest level amongst the city’s major business hubs, pointing out that landmark tower One Peking achieved 100% occupancy in June for the first time since 2024.
JLL expects vacancies in the district to decline further during the second half of the year due to spillover demand from Central.
Across the wider market, Hong Kong recorded a positive net absorption of 279,000 sq ft of office space in June.
A major deal in the insurance sector highlighted this momentum, with RGA Reinsurance leasing an entire 23,500 sq ft floor at Two Taikoo Place in Quarry Bay.
The overall citywide office vacancy rate dropped to 13.1% by the end of June, as vacancies in Central and Kowloon East fell month-on-month by 0.4 and 0.5 percentage points, respectively.
Cathie Chung, Senior Director of Research at JLL, reported that overall Grade A office rents rose 0.1% month-on-month, led by a 0.6% increase in Central and a 0.5% rise in Tsimshatsui.