Hong Kong office market posts Q3 rebound amidst rising leasing demand: JLL

Total net absorption rose by 137.5% and vacancy rate slid to 13.4% QoQ.

Hong Kong’s office market total net absorption during the third quarter (Q3 2025) increased by 137.5% over the first quarter, driven by stronger leasing momentum from IPO-related and wealth management tenants, according to JLL.

The overall office vacancy rate continued to improve, declining from 13.6% in June to 13.4% in September, JLL said in its Preliminary Market Summary Q3 2025 report.

In Central and Kowloon East, vacancy rates dropped by 0.8%, whilst Wanchai and Causeway Bay recorded a rise of 2.5% to 12%.

Overall office rents declined 0.8% quarter-on-quarter during Q3, with all submarkets recording decreases. Rents in Central fell 0.3%, whilst Hong Kong East registered the largest drop at 3.2%, it added.

"Office leasing momentum improved in the third quarter as more occupiers became actively engaged in seeking expansion and upgrade opportunities,” said Cathie Chung, senior director of research at JLL.

“Renewed IPO activity has contributed to stronger leasing activity, while some occupiers took advantage of more favourable rental levels to upgrade premises or consolidate operations,” Chung added.

“However, the market continues to face pressure from robust supply and elevated vacancy rates. We still expect Grade A office rents to decline by approximately 5% for the full year."

Meanwhile, the residential market remained resilient, retail markets have seen modest improvements in leasing, and leasing in the industrial market remained subdued, JLL noted.

As of end-September, High Street Shop vacancy rates declined from 10.7% to 9.7% QoQ, as retailers took advantage of lower rents to secure prime locations.

Residential capital values stabilised in the third quarter, rising 0.4% QoQ, following a 1.1% decline in the previous quarter.

With limited new commitments recorded in the industrial market, the overall vacancy rate rose to 9.3% in Q3 2025 from 9.1% in Q2 2025. 

Prime warehouse rents saw a 2.1% decline in Q3 2025 similar to the 2.4% drop in Q2 2025.