Declining land values in HK offset increasing construction costs, asset reprising : CBRE

Land values fell by up to 30% in the past five years in Central district. 
 

Whilst economic rent in Hong Kong’s office sector was affected by repricing and higher construction cost, CBRE noted this was mitigated by the declining land values in the city. 

The report highlighted that investors are looking more closely at economic rents, which measure the rental income needed to justify development costs, and are reassessing office developments across the region.

CBRE estimated a decline in land values of 25% to 30% for core Hong Kong land locations between 2020 and 2025.

In Hong Kong, the increases in construction cost and asset repricing were offset by a significant decline in land values, according to the recent analysis by CBRE research. 

CBRE added that whilst it projects a modest growth in costs in Asia-Pacific, the United States’ tariff policy will likely add uncertainties. 

Citing its Q1 2025 Cap Rate Survey, it noted that more than 76% of investors surveyed are at least somewhat concerned about the tariffs, which is more pronounced amongst respondents in mainland China, Hong Kong, ang Singapore.