Hong Kong records fourth straight quarter of positive office absorption

Net take-up hit 651,000sq ft in Q1.

Hong Kong’s office market continued to show steady leasing momentum in Q1, recording net take-up of 651,000 sq ft, marking the fourth consecutive quarter of positive absorption, according to Colliers.

Central and Admiralty remained the strongest-performing submarkets, contributing 253,000 sq ft of net take-up, while overall territory-wide vacancy held at 17.1%. The firm noted that leasing demand continues to be concentrated in core locations despite ongoing pressure in non-prime districts.

Activity also strengthened in Kowloon Station following the completion of the International Gateway Centre (IGC), with insurance and financial services firms securing multiple floors. In a major pre-commitment deal, JPMorgan Chase agreed to lease 250,000 sq ft at Artist Square Towers, relocating from The Quayside in 2028.

Market divergence remains pronounced. Central and Admiralty rents rose 3.5% quarter-on-quarter, supported by demand for Grade A1 office space, while Kowloon East rents fell 1.2% over the same period as non-core districts continued to soften.

Colliers said the outlook is being shaped by ongoing “flight-to-quality” demand, with financial institutions, insurers and professional services firms taking advantage of rental adjustments to secure long-term leases in premium buildings. This trend is reinforcing an early-stage recovery in top-tier assets while accelerating divergence across the market.

The consultancy added that Hong Kong’s office sector is becoming increasingly two-tiered, with Central and Admiralty expected to lead the recovery. Prime CBD rents are projected to rise by around 5% in 2026, while decentralised secondary stock is likely to remain under continued rental pressure as corporate occupiers prioritise upgraded, amenity-rich space.