Central office rents surge 20.7% YTD as demand outstrips supply

Premium Central vacancy fell to 8.5% as FIs drove demand for quality space.

Hong Kong’s Central office market is recovering as rents rise and vacancy tightens, with demand from financial institutions driving occupiers back towards the city’s core business district, according to property consultancy firms.

Knight Frank reported that Premium Central rents grew 20.7% year-to-date (YTD) in August, reaching $128.2 per square foot (sq ft) per month, whilst vacancy fell to 8.5% from 14.5% in January.

Colliers said Central rents rose 8.7% YTD, whilst Grade A1 rents increased 15.4%, compared with 0.3% growth across the wider Grade A market.

Central’s vacancy rate fell to 9.9% in August from 15.1% in December 2024, versus 15.8% across Hong Kong’s territory-wide Grade A office market.

Knight Frank said demand for core Grade A harbourfront assets was rapidly outstripping prime contiguous supply, with trophy towers including Cheung Kong Center II and The Henderson nearing full occupancy.

Colliers reported that more than 500,000 sq ft of office space was absorbed in Central during the first eight months of 2026, following approximately 612,000 sq ft of net take-up across 2024 and 2025.

“Driven by an aggressive flight to quality and sustained demand from global and mainland financial institutions, demand for core Grade A harbourfront assets is rapidly outstripping prime contiguous supply,” Knight Frank said.

Meanwhile, Colliers attributed Central’s recovery to stronger capital market activity and expansion amongst financial services firms.

Occupiers are also increasingly using relocations to upgrade their offices.

Knight Frank said relocations accounted for approximately 55% of the top 10 office transactions by floor area in August, up from roughly 40% over the preceding three months.

Colliers’ 2026 occupier survey found that 35% of respondents expect headcount growth over the next year, although only 20% plan to expand their office footprint.

“The survey also found that 68% of occupiers intend to renew in their current building, reinforcing that leasing activity remains predominantly renewal-led,” Colliers said.

Knight Frank said occupiers were using relocations to reposition their office footprints and lock in rents at current levels ahead of expected rental growth.