Office vacancy hits largest quarterly vacancy decline since 2015

Central rents rose 15.8% year-to-date.

Hong Kong's grade A office market recorded its largest quarterly vacancy decline since the second quarter of 2015 in the three months to September 2026, with citywide vacancy falling 0.8 percentage points to 15.5%, according to CBRE.

Gross leasing volume reached 1.2 million square feet in the third quarter, down 6% quarter-on-quarter, though year-to-date volume reached 3.4 million square feet, up 6% year-on-year.

Central accounted for 28% of the quarter's leasing activity, driven by expansionary demand from banking and financial firms, with 73% of Central transactions involving Central A1 buildings.

Citywide quarterly net absorption totalled 858,600 square feet, bringing the year-to-date total to 1.8 million square feet, the highest first nine-month figure recorded since 2018.

Central reported net absorption of 223,000 square feet in the third quarter, one of only four occasions in the past 20 years that the district has exceeded 200,000 square feet in a single quarter.

Hong Kong Island contributed 1.2 million square feet of year-to-date net absorption, with 432,500 square feet occurring in Central. Kowloon East was the only submarket to record negative net absorption year-to-date at minus 16,000 square feet, driven by tenant downsizing in Kwun Tong.

Rents rose 3.2% quarter-on-quarter, the fourth consecutive quarterly increase, bringing year-to-date growth to 6.7%.

Central rents rose 15.8% year-to-date, led by a 24.3% increase in Central A1 rents, the strongest growth since the fourth quarter of 2010. Rents in decentralised submarkets continued to fall.

Ada Fung, chief operating officer of advisory services at CBRE Hong Kong, said demand from financial institutions remained a key driver, particularly in Central, and that occupiers continued to pursue relocation and upgrade opportunities to secure higher-quality space.

"With vacancy trending lower and business confidence improving, we expect prime office locations to remain best positioned to capture demand and outperform the broader market through the remainder of the year," Fung said.