Hong Kong commercial property transaction value grows 6% in YTD Sep

The total value reached HKD33 billion.

The Hong Kong investment market maintained strong momentum into Q3/2025 according to a Savills report, building on the substantial rebound in Q2. A robust equity market performance and softer funding costs fostered investor optimism and enhanced transaction activity across all sectors of commercial real estate.

“However, ongoing US-China trade tensions and geopolitical risks continue to influence the market environment, with end-user preferences, transactional trends, and capital cost fluctuations shaping sector dynamics.”

Here’s more from Savills:

Commercial property transaction value for January to September 2025 reached approximately HK$33 billion, marking a 6% increase compared to the same period in 2024. End users reinforced their dominance, accounting for around 53% of major deals, favoring assets for long-term operational purposes over speculative investments.

Notable Q3 transactions featured the sale of the 19th to 31st floors of One Causeway Bay to Alibaba for HK$7.0 billion, the largest single investment of the year, set to serve as the company's Hong Kong headquarters. Educational institutions stayed active, highlighted by Ling Nam University’s acquisition of the retail podium in Tplus, Tuen Mun, for HK$117 million, to accommodate the growing non-local student population.

In development funding, a Singaporean fund secured iTech Tower 1, 2, 3.1, and 3.2 across Tsuen Wan, Kwai Chung, and Fanling in a HK$5.25 billion deal with Grand Ming. Three of the four data centers have been completed, with two operational, signifying increased institutional and tech sector investments in data infrastructure.

The trend of converting commercial properties to student accommodation has persisted, stimulated by favourable policies. Since July, eight such asset transactions have closed, including Hotel Ease Mong Kok (HK$435 million) and The Nate (HK$272 million), underscoring strong investor interest in adaptive reuse and market diversification.

Funding costs exhibited volatility; the 1-month HIBOR briefly fell below 1% early in Q3 but rebounded above 3.5% by September due to the HKMA’s liquidity management. This normalization, coupled with cautious bank lending, is poised to temper investment momentum. Rising borrowing costs have incentivized landlords to offer longterm, fixed leases with reliable tenants to attract capital seeking income stability.