Hong Kong activity cools amidst APAC expansion losing speed

Report flags capital markets adjusting as office assets return as the top pick since 2020.

Hong Kong is expected to register slower economic activity this 2026, as GDP growth forecast may grow modestly and capital markets adjust to the end of the interest rate cutting cycle, according to a CBRE report.

Asia Pacific (APAC) economic growth is forecast to slow to 3.9% in 2026, from 4.3% in 2025, as growth in China and Japan moderates.

Despite the softer growth outlook, CBRE forecasts APAC capital market investment volumes to rise by 5% to 10% year-on-year (YoY) in 2026, supported by improved net buying intentions.

Despite still being negative, mainland China and Hong Kong investors showed improved net buying intentions in 2026 versus last year, the report said.

"Regional investors in Singapore and Hong Kong SAR, alongside landlords with significant AUM in Australia and Korea, displayed the biggest change in net buying intentions in 2026, identifying the strong rental outlook and leasing demand as the reasons for their stronger willingness to buy," it said.

Office assets emerged as the most preferred investment sector in the region for the first time since 2020, reflecting improving leasing activity in major CBDs.

CBRE added that investor focus continues to shift towards rental income growth as capital value uplift becomes less prominent.