End-users to lead Hong Kong office market in 2026 as quality drives demand

For 2026, JLL forecasts Grade A office capital values to range from flat to a 5% decline.

End-users are expected to remain the dominant force in Hong Kong’s commercial property market in 2026, particularly for core, premium office assets, as occupiers continue to prioritise quality, according to JLL’s 2026 capital markets forecast.

The firm said investor interest is also likely to build in hotel and living sectors, including purpose-built student accommodation, whilst transaction activity in Grade B offices could rise as owners explore conversion opportunities.

JLL cautioned, however, that tight commercial real estate lending conditions and ongoing macroeconomic risks are expected to limit any near-term recovery in capital values. Pricing across sectors is still seeking a bottom, the firm said.

For 2026, JLL forecasts Grade A office capital values to range from flat to a 5% decline, whilst High Street retail capital values are projected to fall by 5% to 10%.

Looking back at 2025, JLL noted that Hong Kong’s investment market remained subdued despite several interest rate cuts since September, as credit conditions stayed tight and uncertainty persisted.

Investment deals of $50m and above totalled $15.9b in the second half, bringing full-year 2025 volumes to $31.6b.

Office assets dominated activity in the second half of the year, accounting for 63.8% of total transaction value. End-users and owner-occupiers seeking higher-quality assets were the most active buyers.

On pricing, Grade A office capital values declined 2.7% in the second half of 2025, easing from a 4.3% drop in the first half, resulting in a 6.9% decline for the full year.

High Street retail saw a sharper correction, with capital values down 17.1% in 2025, driven by significant yield expansion.