Central leads Hong Kong office rental growth as demand strengthens

Island-wide office rents grew by 4.8% in the first five months of 2026.

Hong Kong's office leasing market continued to improve in the first half of 2026, with Hong Kong Island leading the recovery as demand for prime space strengthened, according to Knight Frank.

Knight Frank said island-wide office rents rose 4.8% year-to-date during the first five months of 2026, led by Traditional Central, where rents climbed 10.6%, outperforming Premium Central's 9.0% growth. The consultancy attributed the gains to tightening availability of prime offices and spillover demand from occupiers seeking high-quality space within Central.

Outside Central, rental growth remained selective, with Sheung Wan, Admiralty and Wan Chai North recording increases of between 1% and 5%, while Causeway Bay continued to face rental pressure due to substantial new supply despite improved leasing activity.

Knight Frank also noted that multinational corporations and financial-sector occupiers are increasingly securing additional prime office space ahead of future expansion, negotiating lease renewals earlier amid concerns over limited future supply of high-specification premises.

In Kowloon, rental declines moderated, with average effective rents falling 2.06% in the first half of 2026, an improvement from the 3.6% decline recorded in the second half of 2025. Knight Frank said Kowloon Central and West Kowloon remained the most active leasing markets, with demand also broadening into non-core districts.

The consultancy expects the Kowloon office market to move towards a soft landing in the second half of 2026, supported by expansion from banking, finance and insurance occupiers, improving business conditions in electronics, trading and retail, and a limited future supply pipeline that should help absorb vacancy and stabilise rents.