Prime rent surges 17% YoY, highest in APAC

The city tops regional occupancy costs at $1398.10 psf per year.

Hong Kong recorded prime net headline rent at $108.68 per square foot (psf) a month, rising 17.1% year on year (YoY) and 3.0% quarter on quarter (QoQ), according to Knight Frank.

The firm said that Hong Kong’s prime Central office market has “decisively moved past inflection point,” as vacancy thinned to its lowest in over five years at 9%, whilst rents grew.

Still, Knight Frank predicts increasing rents and a stable market for the next 12 months.

According to the report, the city has the highest YoY rent growth across Asia-Pacific (APAC) markets, and the fifth-highest quarterly rise in the region after Brisbane, Taipei, Tokyo and Melbourne.

Hong Kong also peaks occupancy costs across APAC at $1398.10 psf per year.

The firm attributed the growth to a flight-to-quality trend and steady demand from financial firms. It added that demand for top-grade harbourfront offices is quickly exceeding the available supply of large, continuous floor space.

Vacancy across APAC is thinning, especially in core offices, said Knight Frank.

The firm expects the situation to tighten, with demand concentrating in major business districts and limited future supply in several gateway markets.

Regional new supply is expected to drop 40% in 2027. Although APAC Grade A stock will grow 5.4% this year, most supply is in mainland China and emerging Asia.

Knight Frank said that the gap is widening between supply-constrained and supply-led markets, advising companies to plan expansion ahead and to negotiate with flexibility in tightening markets. 

US$1 = $7.84 as of 23 October