Hong Kong office rents to decline by up to 5% this year

Vacancy pressure from new supply is expected to weigh on rents.

Vacancy rates for premium office assets in Hong Kong’s core locations are tightening according to a JLL report, prompting landlords to pursue proactive leasing strategies. New high-spec developments will further drive tenant upgrades, pulling demand from outdated stock in secondary markets.

“Despite resilient leasing activity anticipated through Q4 2025, vacancy pressure, driven by new supply, will weigh on rents, with a projected decline of 0–5% for the full year. Elevated vacancies and falling rents may lead to an extended correction in capital values,” the report added.

Here’s more from JLL:

The market showed early signs of a gradual recovery in Q3 2025, as total net absorption surged 137.5% q-o-q to 646,000 sq ft. Strong IPO activities and a growing demand for wealth management services fuelled a surge in expansion and upgrading demand.

In Central, PRC law firm Jun He expanded its 9,200 sq ft office space by leasing another 13,600 sq ft in AIA Central. Meanwhile, iCapital has leased 9,077 sq ft in One IFC, relocating from St George’s Building.

Vacancy rates tighten across the majority of submarkets

One Causeway Bay (502,000 sq ft) in Causeway Bay was completed in Q3 2025.

The overall office vacancy rate continued to improve, declining from 13.6% in June to 13.4% in September 2025. Central’s vacancy rate dropped by 0.8 ppt. In contrast, Wan Chai/Causeway Bay saw its vacancy rate increase by 2.5 ppts to 12.0%.

Rent contracts across all submarkets, reflecting sustained downward pressure amid ongoing market recalibration

Overall market rents declined by 0.8% q-o-q in Q3 2025, with all submarkets recording decreases. Central rents fell by 0.3%, while Hong Kong East saw the largest decline of 3.2%.

Office sales transaction activity in Q3 2025 remained dominated by end-users, as investors remained sidelined amid persistently tight bank credit conditions. Capital values in the overall market dropped by 2.7% q-o-q in Q3 2025.