Kowloon office rents to decline by 9% to 11% this year | Real Estate Asia

Kowloon office rents to decline by 9% to 11% this year

Oversupply still persists in the market.

Steve Ng, Executive Director and Head of Kowloon Office Strategy & Solutions at Knight Frank, noted that in the first half of the year, the office market in Kowloon faced challenges due to weak sentiment and an oversupply of over 6.7 million sq ft of both new and existing inventory from previous years.

“Demand remains scattered, and there have been only a few significant transactions. The overall atmosphere is stagnant, with many tenants adopting a cautious "wait-and-see" approach,” Ng added.

Here’s more from Knight Frank:

Kowloon office rents in June 2025 fell by 3.6% year on year, translating to less than HK$1 per sq ft in absolute figures, which suggests a potential weak trend in the overall market. The office vacancy rate also supports this trend showing only a slight 1.2% increase. Despite a mild drop in office rents and a rise in vacancy, tenant feedback continues to show a lack of confidence in market recovery, with a prevailing sense of caution and anticipation of further decline. This flat trend suggests an ongoing caution, instead of recovery sign.

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A significant portion of Kowloon’s tenant mix consists of supply chain-related industries, including manufacturing, trading, and logistics. Even though the US Court has temporarily paused the tariff war, ongoing unilateral trade pressures continue to unsettle these tenants. As a result, office demand is expected to remain weak in the next few quarters. Along with the abundant office supply still swamping the market, we anticipate the office rents in Kowloon to drop by 9% to 11% in 2025.

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