Large tenants drive renewed activity in Kowloon’s office market

Right-sizing remains a key trend for occupiers.

Office leasing activity in Kowloon has picked up ahead of the holiday season, offering tentative signs of support for the district’s long-underperforming office market, according to a report by Knight Frank.

The consultancy said sizeable occupiers in Kowloon have become more active in relocation decisions in recent months. While space optimisation remains the primary motivation, tenants are increasingly seeking higher-quality buildings and more prime locations than in previous quarters.

Knight Frank noted that compared with earlier in the year, large occupiers are now showing stronger risk-management discipline and clearer objectives when committing to relocations. This has translated into a greater willingness to invest in office upgrades and to negotiate longer lease terms with landlords, taking advantage of the tenant-favourable market.

Performance has been particularly strong among office buildings in Tsim Sha Tsui that offer sea views. Demand for these premises has been driven mainly by insurance companies and investment funds, supported by the area’s proximity and connectivity to the Chinese mainland, which facilitates their business operations, the report said.

Looking ahead, Knight Frank said the market’s downward adjustment is beginning to slow as 2025 draws to a close, with a further easing in the pace of decline expected in early 2026.