"Hong Kong Property" JLL: The government will not push for commercial land tenders next year, which will help the office market absorb supply

Alex Barnes, Managing Director of Jones Lang LaSalle Hong Kong, stated that the government's decision not to launch any commercial land tenders in the coming year is positive news for the commercial real estate market. This move allows more time for the office market to digest supply, contributing to a more stable overall office leasing market. The absorption rate for office leasing has improved since last year, and the vacancy rate in some sub-market areas has begun to decline. The rental rates for Grade A office spaces in Central have bottomed out, and it is expected to rise by 0% to 5% this year.

Koo Kin Cheung, Head of Valuation Advisory at Jones Lang LaSalle, noted that recent government land tenders have been sold at or above market valuation limits, reflecting a significant improvement in developers' willingness to bid for land compared to previous years. However, the government has not significantly increased land supply, indicating a desire to adopt a more conservative strategy to avoid excessive land supply putting pressure on the property market. The government plans to release more land for sale only after the property market further recovers, which is expected to lead to higher land prices