Border Opening Boosts Office Leasing Activities, Although Net Absorption Yet to See Immediate Rebound

• Retail sales rose 17.3% y-o-y in the first two months of 2023, as the mainland China-Hong Kong border opening supported the gradual recovery of the retail market, while visitor arrivals rebounded notably
• High street rental declines bottomed out and vacancy rates dropped during the quarter, yet staffing shortages are limiting retailer expansions
• Q1 overall net absorption of Grade A office space remained negative at -248,000 square feet; rents fell 1.5% q-o-q