Despite increased supply and a vacancy rate plateauing at 14 per cent, prime office rentals will rise up to 5 per cent this year, a property agency said
Hong Kong’s office property market is likely to see its empty spaces plateau at 14 per cent as vacancy rates in Central fell to more than a three-and-a-half-year low in June, according to a property agency.
The property consultancy said that although the overall vacancy rate for the office property sector fell to 13.1 per cent in the first half, the supply pipeline would increase the number of office spaces and plateau at 14 per cent in the coming months.
“Another 2 million square feet of office space will be completed,” a property agent said.
Premium office vacancy rates in Central dropped to 8.8 per cent, the lowest in 43 months, the agency said. In May, prime office vacancy rates in the area stood at 9.2 per cent compared with 10.9 per cent at the end of 2025.
For instance, new buildings such as Central Crossing in the city’s main business district were set to be completed this year, according to the agency.
Despite the new supply, the agency forecast there would be as much as a 5 per cent rise in overall prime office rents in Hong Kong for the full year, following the 3.2 per cent increase in the first six months.
Central would lead with a 10 to 15 per cent increase for the entire year, followed by the 0 to 5 per cent increments in the districts of Wan Chai/Causeway Bay and Tsim Sha Tsui.
However, both Hong Kong East and Kowloon East were likely to see rents decline by 0 to 5 per cent in 2026.
“We have revised our forecast for Central grade A office rents, reflecting stronger leasing demand from financial institutions and related companies,” the agent said.
In particular, office buildings such as One International Finance Centre and Two International Finance Centre (IFC) in Central recorded rental increases of 23.4 per cent and 20.2 per cent, respectively, both exceeding HK$130 (US$16.60) per square foot.
The rental increases would be supported by a number of existing tenants that “were expanding”, the agent said.
“There’s also a queue of [would-be] tenants, who are all trying to get into the buildings as well, so it’s a mix,” the agent said.
In June, fintech company iCapital more than doubled its office footprint, leasing a 9,000 sq ft space in One International Finance Centre as it sought to capture rising demand for wealth-management services in Asia. The firm’s previous office was in the St. George’s Building on Ice House Street, also in Central.
Meanwhile, if office rents in Central rise above HK$140 per square foot on the back of rising demand, then “the resulting spillover demand could broaden the recovery more notably beyond a single district,” the agent added.
Additionally, despite a potential interest rate increase before the end of the year, the decisions of the firms fuelling demand for office space in Central were “not contingent on interest rates,” the agent said.
