Hong Kong property market shows early stabilisation: Colliers

Retail investment value surged 109% quarter-on-quarter, whilst office accounted for most of the city’s investment volume.

Hong Kong’s property market showed early signs of stabilisation in the first quarter of 2026, supported by lower borrowing costs and resilient occupier demand, according to Colliers.

The office sector accounted for 59% of Hong Kong’s total investment volume during the quarter, whilst leasing activity also picked up.

Retail investment value rebounded sharply, rising 109% quarter-on-quarter, driven by food and beverage end users.

Hong Kong office cap rates stood at 3.10% to 4.10%, whilst retail cap rates ranged from 3.25% to 5.10%. Industrial cap rates were at 3.10% to 4.20%.

Colliers’ data showed industrial cap rates in Hong Kong moved upward QoQ, whilst office and retail cap rates were flat. The city’s interest rate stood at 2.16%, with inflation at 1.70%.

Across the Asia Pacific, cap rates remained broadly stable despite geopolitical tensions, higher oil prices, and renewed inflationary pressures. Colliers said the region continues to benefit from deep domestic capital pools, although investment momentum is becoming more selective.

The firm said strength across the region was concentrated in prime assets, defensive sectors, and economies with strong long-term fundamentals.

In Singapore, prime real estate remained supported as investors focused on income stability and long-term capital preservation. Cap rates stood at 3.00% to 3.50% for office, 4.30% to 4.80% for retail, and 5.00% to 6.00% for industrial.

Tokyo’s commercial market also remained stable, with prime offices supported by flight-to-quality demand, retail backed by inbound tourism, and logistics demand staying steady despite elevated vacancy from new supply.

In mainland China, sentiment remained cautious. Beijing stayed risk-averse due to oversupply, weak demand, and debt pressures, whilst Shanghai saw stronger domestic-led transactions.

Industrial and logistics strength was concentrated in selected markets. Jakarta continued to outperform due to strong demand and near-full occupancy, whilst Mumbai saw demand from data centres, third-party logistics, and e-commerce drive 5% to 6% YoY rental growth.