
Rising rents in Central and stronger leasing demand suggest office market may be stabilising after years of slump
The prime office market in Hong Kong is showing tentative signs of revival as landlords report rising rents, increased leasing activity and improved occupancy — developments that could mark the beginning of a broader recovery in 2025. In November, average rents for Grade-A offices in the Central business district nudged upward — the first monthly increase since mid-2022 — driven by tighter vacancy and renewed demand for premium space.
The rebound was underpinned by stronger leasing momentum in the third quarter of 2025, when net absorption soared to 646,000 square feet, according to data from a major market-tracking firm.
That represents the largest quarterly gain in years and helped push vacancy rates down after prolonged oversupply.
Notably, much of the new demand came from financial firms, wealth managers and IPO-related tenants seeking well-connected, high-specification office space — a reflection of renewed confidence in Hong Kong’s role as a regional financial hub.
Major corporations and global firms are taking advantage of historically low rents to expand or relocate operations.
Several high-profile lease deals in the Central district have been signed in recent months, signalling that some multinational companies view Hong Kong as attractive both operationally and cost-effectively.
Nonetheless, the recovery remains uneven.
Analysts caution that new office supply — including several large developments scheduled for completion in 2025 — will continue to exert pressure on rents, especially outside core districts such as Central.
The broader Grade-A market in Kowloon and peripheral areas remains soft, with many tenants still negotiating discounted rates or downsizing.
Market observers say that continued momentum will depend on sustained demand from finance, professional services, and firms seeking “flight to quality” upgrades.
They also note that macroeconomic headwinds, interest-rate policies, and regional geopolitical uncertainty could still weigh on investor sentiment.
For now, though, Hong Kong’s prime office segment appears to be clawing back from the slump that began in 2019 — with improving rent levels, tighter vacancy and renewed leasing activity offering a cautiously optimistic outlook for landlords and tenants alike.
The rebound was underpinned by stronger leasing momentum in the third quarter of 2025, when net absorption soared to 646,000 square feet, according to data from a major market-tracking firm.
That represents the largest quarterly gain in years and helped push vacancy rates down after prolonged oversupply.
Notably, much of the new demand came from financial firms, wealth managers and IPO-related tenants seeking well-connected, high-specification office space — a reflection of renewed confidence in Hong Kong’s role as a regional financial hub.
Major corporations and global firms are taking advantage of historically low rents to expand or relocate operations.
Several high-profile lease deals in the Central district have been signed in recent months, signalling that some multinational companies view Hong Kong as attractive both operationally and cost-effectively.
Nonetheless, the recovery remains uneven.
Analysts caution that new office supply — including several large developments scheduled for completion in 2025 — will continue to exert pressure on rents, especially outside core districts such as Central.
The broader Grade-A market in Kowloon and peripheral areas remains soft, with many tenants still negotiating discounted rates or downsizing.
Market observers say that continued momentum will depend on sustained demand from finance, professional services, and firms seeking “flight to quality” upgrades.
They also note that macroeconomic headwinds, interest-rate policies, and regional geopolitical uncertainty could still weigh on investor sentiment.
For now, though, Hong Kong’s prime office segment appears to be clawing back from the slump that began in 2019 — with improving rent levels, tighter vacancy and renewed leasing activity offering a cautiously optimistic outlook for landlords and tenants alike.



























