What will drive office leasing demand on Hong Kong Island in H2 2025?

Analysts see an improvement in market momentum.

According to a Knight Frank report, market momentum on Hong Kong Island’s office sector is improving as the macroeconomic landscape stabilises. Hedge funds are the main market players, with significant leasing transactions like Jane Street's 223,000 sq ft deal at Harbourfront Site 3. Legal firms serving PRC companies’ IPOs could be an emerging driver of demand.

Here’s more from Knight Frank:

Buildings in Central with fitted interiors and unit sizes between 3,000 and 5,000 sq ft are gaining traction due to their prime location and suitable size. Tenants are looking for high-quality spaces with maximum incentives. Although the leasing market is still on the path to recovery, tenants remain vigilant in their search for flight-to-quality/functionality spaces that offer maximum incentives.

Hong Kong leads in IPO fundraising for the first half of 2025, attracting PRC companies from multiple sectors. This resurgence in IPO activity is expected to boost leasing demand on Hong Kong Island in the second half of 2025.