Retail cap rates rise whilst office and industrial rates remain stable in Q4

Tourism recovery lifted high street rents as vacancies decline.

Hong Kong retail cap rates reached a range of 3.25% to 5.10% in the fourth quarter of 2025, whilst office and industrial rates remained stable, according to a Colliers report.

The recovery in tourism supported high street rents and reduced vacancies, whilst financial services tenants provided the volume for leasing activity.

Office cap rates held steady between 3.10% and 4.10%, as demand for premium space came from Mainland Chinese companies using the city for global listings and financing.

Investment activity also focused on educational assets and undervalued properties, the report noted.

The industrial sector ranked second in transaction value, driven by en-bloc deals by end-users and operators, whilst industrial cap rates ranged from 3.00% to 4.10%.

The 1-month HIBOR fell to 3.10%, whilst the inflation rate rose to 1.20%.