Office and accommodation sectors lead investment activity

Q1 office investment volume fell 21% QoQ to $8.7b.

The office and accommodation sectors remain the main drivers of Hong Kong’s investment market, according to Colliers Q1 2026 Market Report.

“Office assets continue to trade at deep valuation discounts, presenting attractive entry points for end-users amid early signs of stabilisation in prime rents,” the report said.

Accommodation assets are also drawing interest as a defensive, value-add option, supported by policy-driven growth in the education sector.

Despite geopolitical tensions in the Middle East, investor sentiment has improved, with Hong Kong increasingly viewed as a safe-haven market offering attractive pricing and a margin of safety.

Expectations of lower HIBOR, trending toward 2%, and renewed capital inflows are supporting demand for stabilised, income-producing assets.

For transactions above $100m, office investment volume reached $8.7b in the first quarter, down 21% quarter-on-quarter from a strong Q4 2025.

Activity was concentrated in a few large deals, including acquisitions by JD Property and City University of Hong Kong, reflecting ongoing end-user demand.

The hotel and serviced apartment sector outperformed, with Q1 transaction value reaching about 80% of full-year 2025 volumes, showing continued investor interest.

Retail investment recorded modest quarter-on-quarter growth, driven by acquisitions from two mainland Chinese restaurant groups purchasing retail podium space.