Central Hong Kong leads office rental growth as Kowloon leasing stays subdued

Grade A office rents in Central grew 6% in February.

Rental growth in Hong Kong’s premium Grade-A office market strengthened in February, with rents in Central rising 6.0% year-on-year and 2.8% year-to-date, according to Knight Frank. This marks a notable acceleration from January’s 2.3% annual increase, reflecting resilient occupier demand for high-quality space.

Knight Frank reports that enquiry levels for prime offices remain steady, underscoring continued interest in top-tier buildings despite broader external headwinds. The consultancy highlights growing momentum from Middle Eastern capital and family offices, which are expected to further diversify into key Asia-Pacific hubs, including Hong Kong.

This trend is anticipated to drive demand for smaller Grade-A office floorplates—particularly units of 5,000 sq ft or below—presenting leasing opportunities for landlords targeting more flexible occupier requirements.

In Kowloon, Knight Frank notes that activity softened over the Chinese New Year period, with limited leasing movement recorded. Yau Tsim Mong remains a focal point for office upgrades, while Kowloon East continues to see relocation and renewal activity.

A major transaction during the period involved a European insurance firm committing to 100,000 sq ft at IGC in Kowloon Station, becoming the fourth significant tenant in the newly completed Grade-A development. According to Knight Frank, occupiers in banking and finance, insurance, and professional services continue to underpin demand, drawn by opportunities linked to mainland China and comparatively affordable rents in Kowloon.