Kowloon East remains tenant-favoured amidst proactive office relocations

The Kowloon office market shows early signs of stabilisation heading into 2026.

Kowloon’s office market is showing early signs of stabilisation as tenant activity becomes more proactive, according to Knight Frank. While transaction volumes fell short of expectations compared to December 2025, the market is seeing larger average lease sizes, driven by relocations of sizeable companies seeking more strategic space.

Knight Frank highlighted that tenants occupying over 10,000 sq ft are making “active” leasing decisions, in contrast to last year’s focus on short-term renewals. For instance, a US-based homeware vendor reduced its footprint by 10% and relocated within Kwun Tong, while a local construction firm downsized by 20% to 13,000 sq ft and also moved within the same area. These movements remain concentrated in Kowloon East, reflecting both the fragility and ongoing appeal of the submarket.

Kowloon East continues to be tenant-favoured, while Kowloon West and West Kowloon are stabilising. Knight Frank noted that Kowloon Central is showing potential for a rent rebound as Harbour City’s vacancy falls below 8.6%. The consultancy added that the overall Kowloon market is awaiting further stability for a full “soft landing,” but early signs indicate that leasing dynamics are improving as businesses make more considered space decisions in early 2026.