‘Measured recovery’ is in progress as mainland investment hits a half-decade high, consultancy says
Surging mainland Chinese investment in Hong Kong’s commercial real estate sector has helped set the stage for a “measured recovery” in 2026, according to a property consultancy.
Investment from the mainland rose to the highest level in five years in the last quarter of 2025, and deal value in 2026 was set to increase by 10 per cent, the property consultancy said.
In the luxury residential segment, mainland capital accounted for about 80 per cent of transactions exceeding HK$100 million on The Peak and in Southern district, according to a local property agency.
In the last three months of last year, capital from the mainland accounted for about 60 per cent of the sector’s “big-ticket deals”, defined as those with a value of more than HK$100 million (US$12.8 million), the property consultancy said in a report on Wednesday.
Last year “marked a turning point” for the city’s battered commercial property sector, with total investment value jumping 12 per cent from a year earlier to HK$39 billion, a property consultant said.
“This momentum sets the stage for 2026, where we expect capital deployment to accelerate as investors move to capture repricing opportunities before they narrow,” the property consultant said.
International investors accounted for 15 per cent of fourth-quarter investment, with the rest coming from Hong Kong-based investors, the property consultancy said. For the full year, there were 85 major property deals, marginally higher than the 82 in 2024, it added.
Office assets in prime central business district locations remained undervalued, while other assets continued to offer strong fundamentals and medium to long-term growth potential, the property consultant said.
“With Chinese mainland capital and global funds returning, and full-year transaction value forecast to climb up to 10 per cent, Hong Kong is poised for a measured recovery supported by diversified investment demand,” the property consultant said.
The property consultancy estimated that 2026 investment in Hong Kong’s commercial real estate could reach HK$42 billion.
The biggest deal last year was also the biggest since 2021: Alibaba Group Holding and Ant Group shelled out HK$7.2 billion in October to buy the top floors of One Causeway Bay , the office tower that Mandarin Oriental International is building on the site of The Excelsior hotel.
The acquisition totalled 301,555 sq ft, comprising the top 13 floors of the 24-storey building, with parking space for 50 vehicles and signage rights to the tower. Alibaba owns the Post.
Meanwhile, OCBC Hong Kong, a unit of Singapore-headquartered lender OCBC, bought China Huarong Tower , a 26-storey office tower in Wan Chai, in the fourth quarter for HK$1.2 billion, according to information tracked by the property consultancy.
“Chinese mainland capital is flowing back into the Hong Kong market, and investors from Southeast Asia and international funds are also returning, viewing the city as a market for diversification and growth in selected sectors,” the report said.
As for investment picks, the property consultancy said the office and accommodation sectors were favoured, as the former presented “undervalued opportunities”, while the latter rested on “solid fundamentals” and offered medium to long-term growth.
The residential segment was also poised to remain an “ultra-luxury property year”, with new and secondary luxury home deals likely to jump by 50 per cent and 60 per cent, respectively, according to the local property agency. Prices were estimated to rise by as much as 10 per cent.
The bet on upscale homes was underpinned by geopolitical uncertainties, which had prompted wealthy mainland Chinese buyers to favour Hong Kong’s trophy assets.
In addition, the city’s various talent admission schemes had welcomed about 260,000 professionals and high-net-worth individuals and their families as of mid-December, the property agency said. These families were expected to purchase high-end properties in Hong Kong as they made the city their base, it said.
Hong Kong’s initial public offering fundraising was also projected to hit HK$350 billion this year, with about 150 new stocks making their debut, which could translate to more allocation for luxury properties, the agency said.
