Hong Kong Grade A office market sees strong take up in Q4 2025

Overall Grade A rents rose 0.6% QoQ in Q4, the first quarterly increase since Q2 2019.

Hong Kong’s Grade A office market saw weaker leasing volumes but stronger space take-up in the final quarter of 2025, according to CBRE, as occupiers absorbed space at the fastest pace in more than a decade despite heavy new supply.

CBRE said gross leasing volume fell 17% QoQ to 1.1 million sq ft in Q4 2025, easing from a high base in Q3. For the full year, gross leasing totalled 4.3 million sq ft, down 2.0% YoY.

Net absorption, however, surged. Quarterly net absorption reached 1.5 million sq ft, the highest level since Q2 2008, with all major submarkets recording positive take-up. Citywide net absorption for 2025 came in at 2.1 million sq ft, the strongest annual performance since 2018.

Core districts led demand. In Central, net absorption reached 234,800 sq ft in Q4, the highest since Q2 2015, whilst full-year absorption of 496,400 sq ft was the strongest since 2007. Tsim Sha Tsui recorded 626,100 sq ft of net absorption in Q4, its highest since Q2 2008, and 844,700 sq ft for the full year, which CBRE said was a record.

Vacancy nevertheless increased due to a heavy supply pipeline. About 2.9 million sq ft of new office space was added in 2025, pushing the overall vacancy rate up 0.4 percentage points to 17.3%, or about 15.9 million sq ft of vacant space.

Central was an exception, with vacancy falling for the fourth consecutive quarter to 11.1%.

Rents showed early signs of stabilisation. Overall Grade A rents rose 0.6% QoQ in Q4, the first quarterly increase since Q2 2019, led by Central (3.7%) and Tsim Sha Tsui (1.7%).

For the full year, however, rents were still down 2.9% YoY, the smallest annual decline since 2019. Central rents were broadly flat at -0.1%, whilst Tsim Sha Tsui recorded 2.9% growth.

Looking ahead, CBRE expects leasing momentum to improve in 2026, but said vacancy is likely to remain elevated compared with pre-cycle levels. It forecasts office rents to decline within a 3% range over the year.