HK sees subdued real estate market in H1 despite strong APAC demand

CBRE raised its 2025 growth forecast to 10%–15%.

Hong Kong's real estate market remained sluggish, despite strong demand in the Asia-Pacific region, which has driven CBRE to raise its full-year 2025 real estate investment growth forecast to 10%–15%.

“Momentum in investment activity is gaining traction in Asia Pacific and is expected to remain strong in the second half of the year,” said Greg Hyland, Head of Capital Markets, Asia Pacific, for CBRE. 

“There is particularly strong investment activity in Korea, Japan, and Singapore, while markets like Australia and Hong Kong SAR are seeing a more subdued pace in H1, although we are seeing evidence that both markets are about to turn.”

Total office leasing in the H1 2025 recorded 1.8 million sq. ft., a 29% year-on-year(YoY) decrease, representing only 42% of the full-year total of 2024.

Citywide net absorption recovered to 147,700 sq. ft. after two negative quarters, resulting in a negative absorption of 111,100 sq. ft. in H1, well below 1 million sq. ft. during the same period in 2024.

Overall rents declined 0.6% quatre on quarter and 2.8% YoY, which CBRE believes will force landlords to adopt more accommodative lease restructuring and incentive strategies.