Nearly half of Hong Kong office tenants report ESG shortfalls

48% reported that their leased buildings do not meet their ESG expectations.

Almost half of Hong Kong’s office occupiers say their buildings are failing to meet their environmental, social and governance (ESG) expectations, according to Knight Frank’s latest report Through the Occupiers’ Lens: Rethinking ESG Priorities in the Office Sector.

The survey of 153 Hong Kong office occupiers revealed that “48% reported that their leased buildings do not meet their ESG expectations.”

The report also uncovered a striking lack of transparency in landlord-tenant communication on sustainability improvements. “78% of occupiers were unaware of upgrades in the plan to address existing or future ESG requirements,” Knight Frank found.

“Occupiers increasingly focus on features that deliver direct advantages for their companies and employees when evaluating potential office spaces, rather than relying solely on certifications,” the report stated.

High-priority ESG features for tenants include convenient access to public transport (89%), energy, water, and waste reduction systems (75%), and indoor air quality monitoring (65%), amongst others.

The growing dissatisfaction is also being translated into financial expectations. According to the report, “50% of respondents anticipate rental discounts for properties with inadequate ESG performance,” whilst “21% are willing to pay rental premiums for buildings meeting their ESG standards.”

Jackie Cheung, Director of ESG for Asia-Pacific at Knight Frank, emphasised that landlords who fail to address these demands risk both occupancy and revenue.

“Landlords with a robust asset enhancement strategy that addresses the gap between key occupiers’ needs and current market limitations across environmental, social, and governance dimensions are well positioned to unlock ESG premium potential, reduce the risk of brown discounts, and strengthen long-term rental resilience.”