Hong Kong office market sees selective recovery in 2025

Prime offices outperform in Hong Kong's uneven leasing recovery.

Hong Kong’s Grade A office market showed signs of selective recovery in 2025, with strong demand for premium buildings even as overall vacancy reached a record high, according to research from Savills.

The consultancy said a pronounced “flight-to-quality” trend is shaping leasing activity in Hong Kong, benefiting newer and higher-grade office buildings while leaving secondary locations more vulnerable.

According to Savills, the overall Grade A office vacancy rate rose to 15.5% in December 2025, up 0.9 percentage points year-on-year, although performance varied significantly across districts.

In the city’s prime office hub of Central, vacancy declined 1.9 percentage points to 11.3% in Q4 2025, reinforcing the district’s position as a safe haven for occupiers seeking high-quality space.

By contrast, vacancy levels climbed in other submarkets. Tsim Sha Tsui saw vacancy increase 5.6 percentage points to 14.8%, largely due to new supply from the completion of International Gateway Centre. Meanwhile, Kowloon East recorded the highest vacancy in the market at 24.5%, reflecting structural oversupply and changing tenant preferences.

Rental levels generally softened across the market, although prime districts proved relatively resilient. Average rents in Central held at around HK$85 per sq ft, according to Savills.

The divergence between prime and secondary buildings is increasingly visible in occupancy data. Savills noted that premium Grade A buildings in Central — including Two IFC, Chater House and The Henderson — maintained occupancy rates above 88%, while older properties in the same district recorded occupancy below 75%.

A similar pattern is emerging in Tsim Sha Tsui, where newer projects such as The Gateway and K11 Atelier Victoria Dockside continue to attract strong tenant demand, in contrast with ageing office stock.

Savills said the market’s uneven recovery underscores how occupiers are prioritising modern, high-specification buildings, reinforcing the flight-to-quality trend shaping Hong Kong’s office sector.