City’s prime office market shows recovery signs as Central nears full occupancy, boosting rentals and spillover demand in nearby districts
Hong Kong’s overall prime office vacancy rate fell to a seven-month low in May, driven by spillover demand from Central, where premium offices were close to full occupancy, according to the property agency.
With Central’s grade A office vacancy rate holding steady at 9.2 per cent, tenants appeared to have found their way to neighbouring Wan Chai and Causeway Bay. Vacancy there edged down to 9.8 per cent in May from 10.4 per cent in April, the lowest in 10 months, the property consultancy said in its latest report. Net take-up in the district surged to 98,600 sq ft, the highest since April 2024.
“We are beginning to see spillover demand as premium offices in Central approach full occupancy,” a property agent said. “This has helped drive the overall office vacancy rate down to 13.3 per cent as at end-May, although occupiers are likely to remain focused on newer or higher-quality buildings.”
Overall empty prime office space in the city stood at 13.5 per cent in April.
The overall office leasing market recorded a positive net absorption of 205,000 sq ft, supported by robust demand from securities firms. Citic Securities leased an entire floor of about 18,000 sq ft at Citic Tower in Admiralty, while Ping An Securities took up around 14,900 sq ft at The Center in Central.
“Overall grade A office rent increased by 0.3 per cent month on month in May,” another agent said. “Central remained the primary driver of rental growth, with rents rising by 0.7 per cent month on month, while Wan Chai and Causeway Bay recorded a more modest increase of 0.3 per cent.”
Beyond securities firms, banks and other finance-related sectors have been the most active in leasing, particularly in prime offices in Central.
Fintech company iCapital more than doubled its office footprint in Hong Kong, leasing 9,000 sq ft at One International Finance Centre in the city’s main business zone, the group announced earlier this month.
Endowus also doubled its office space, taking a 4,290 sq ft full floor at Chinachem Tower in Central – becoming the first tenant to occupy the renovated commercial building.
The digital wealth management platform moved to its new office early this month, relocating from Chinachem Hollywood Centre , also in Central.
The expansion came after the group’s Hong Kong client base doubled, assets under advice tripled, and alternative assets grew fivefold. Year-to-date assets under advice climbed 50 per cent and were 2.5 times higher than a year earlier, according to a company statement.
Another property agency forecast that high-quality assets in other districts would benefit from firm demand in Central.
“While prime offices in Central are likely to lead the recovery, it will not be entirely confined to this segment,” another agent said.
“The flight-to-quality trend and improvements in space requirements will continue to support demand for high-specification buildings, particularly in core locations. Still, well-positioned assets in select areas such as Sheung Wan, Admiralty and Wan Chai North will also benefit from the recovery, given the limited supply in Central.”
Overall, Central was expected to outperform, but recovery across the broader market would remain uneven and closely tied to building quality and location, the agent added.
