Capital markets rebound as Q4 property investment hits $20.3b

End-user deals drive volumes after rate cuts

Hong Kong’s capital markets recorded a late-year recovery as commercial property investment volume surged 130% quarter on quarter to $20.3b in Q4 2025, according to CBRE, marking the strongest quarterly showing of the year.

The increase followed a 50-basis-point US Federal Reserve rate cut during the quarter, which lowered Hong Kong’s Best Lending Rate to between 5.0% and 5.25%, easing financing conditions and improving deal viability for capital-intensive acquisitions.

End users accounted for 79% of total transaction value in Q4, as corporates and owner-occupiers capitalised on softer asset pricing to secure strategic premises, while institutional investor participation remained selective amid ongoing valuation resets.

Large transactions underlined the shift toward occupier-led capital deployment, including Alibaba Group and Ant Group’s $7.2b office acquisition, which anchored quarterly volumes despite continued distressed asset sales in secondary locations.

CBRE said the Q4 rebound signals stabilisation rather than a full recovery, with capital markets activity increasingly shaped by rate-sensitive end-user demand and continued price discovery across the investment landscape.