Kowloon East office rents to decline by up to 6% in 2H 2026

Meanwhile, rents in the broader Kowloon market could decline by up to 3%.

Rental declines across Kowloon's office market are moderating, with vacancy rates approaching a peak as demand improves, according to Knight Frank.

Steve Ng, Executive Director and Head of Kowloon Office Strategy & Solutions at Knight Frank, said office rents continue to fall but at a slower pace, signalling a more stable outlook. Kowloon Central and Kowloon West are showing early signs of stabilisation, while Kowloon East remains under pressure due to higher vacancy levels.

Knight Frank said demand has strengthened with the return of banking and finance firms, insurers and PRC companies, particularly for larger office spaces. The agency expects a supply gap from 2027 to support a "soft landing" for the market, with limited new office supply across Kowloon and future developments concentrated in areas including Tung Chung and the Northern Metropolis.

Tenant demand continues to favour West Kowloon and Kowloon Central, while recent quarterly performance suggests the market is stabilising after weaker conditions earlier this year.

Knight Frank forecasts Kowloon East rents will decline by 4% to 6% in the second half of 2026, while the broader Kowloon office market is expected to record a more modest fall of 1% to 3% as rental levels approach a floor.