Office market records 15.6% vacancy; Central rents rise 3%

Quarterly take up reached 880,125 net square feet with an average unit rent of $49.5 per square foot.

Hong Kong’s office market recorded a 15.6% vacancy rate in the fourth quarter of 2025, with a positive quarterly take-up of 880,125 net square feet and an average unit rent of $49.5 per square foot.

Premium rents in the Central district rose 3% year on year, driven by a flight-to-quality trend among financial institutions and law firms, according to a Knight Frank report.

The report also cited various major leasing transactions for the quarter across the territory, including QRT’s 137,306-square-feet lease at Two International Finance Centre in Central, and Futu Securities’ 38,169-square-feet lease at Two Pacific Place in Admiralty.

Other top leases include those from Agba Group, GE Medical Systems, Aggressive Construction, and Cooperatieve Rabobank.

The banking and finance sector is the primary driver of demand, accounting for 62% of all quarterly take-up on Hong Kong Island.

Rents on traditional office buildings in Central fell by 7.1% despite the growth in the district.

Peripheral markets also saw a decline, as rents in Causeway Bay dropped by 8.1% and Quarry Bay by 8.6%.

Kowloon’s vacancy rate surged following the completion of the 1.9 million-sq-ft International Gateway Centre (IGC) in West Kowloon, also affecting Tsim Sha Tsui’s vacancy rate, which rose to 21%.

Excluding IGC, the vacancy rate in the district stands at 7.5%, the report said.

The market remains “cautiously optimistic” but tenant-favourable in 2026, as core districts are expected to remain the primary beneficiaries of upgrade-driven relocations.

Non-core areas will continue to navigate heightened competition from new developments and existing vacancies, according to the report.