Kowloon office rents to decline by 2-4% this year

Tenant activity was subdued in November 2024.

In a recent report, Knight Frank revealed that in November 2024, the Kowloon office market remained notably quiet. Despite a slowdown in new office completions, the market continued to grapple with an oversupply from previous years. This ongoing imbalance has kept rental rates under pressure and vacancy levels high.

Tenant activity was subdued, with a 20% MoM drop in letting transactions and only two notable leases over 10,000 sq ft recorded.

Here’s more from Knight Frank:

Given the market uncertainties, Kowloon office tenants are actively seeking rent reductions and resizing their spaces during renewals. They are also rigorously evaluating the cost-performance value of offices when considering relocations.

In response, landlords are adjusting their asking rents, increasing agency fees, and offering various incentives to maintain competitiveness. The outlook for the Kowloon office market in 2025 remains challenging, with overall office rents projected to decline by 2% to 4%.