Hong Kong property transaction volume hits HK$14b in the first five months of the year

Over half of the activity came from the office sector.

Russell Lam, Knight Frank’s Executive Director for Capital Markets, revealed that in the first five months of 2025, properties valued at HK$100 million or more saw a total transaction volume of HK$14 billion.

“This transaction volume is on par with the same period in 2024; however, there was a slight 7% decrease in the number of transactions compared to the previous year,” Lam noted.

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The office sector led the market, accounting for 52% of total activity, driven by strong demand from end-users for discounted and distressed assets. A notable transaction during this period was the acquisition by the Stock Exchange of Hong Kong Limited of levels 42 to 50 of One Exchange Square.

Hotel and serviced apartments followed, making up 20% of transactions, and recorded a substantial gain of 430% year on year (YOY). This surge was supported by government initiatives aimed at attracting non-local university students and promoting the Top Talent Pass Scheme.

Retail transactions represented 9% of the total, as this sector continued to face challenges due to weak local consumption and high labour costs. Development sites accounted for only 4% of transactions, as soft demand, high development costs, and uncertain land conditions continued to affect investor confidence.

Looking ahead to the rest of 2025, the focus is expected to shift towards student accommodation and education-related assets. This change is driven by the government's plan to launch a pilot scheme that facilitates the conversion of hotels and other commercial properties into student hostels.

Furthermore, the Hong Kong government has pledged full support to the city's universities in attracting foreign students, especially in light of recent changes to U.S. student visa policies for Chinese students, which are expected to further stimulate demand for student accommodation.