Office market holds momentum as flight-to-quality drives leasing activity

It was led by the Central / Admiralty submarket.

Hong Kong’s office market recorded sustained leasing activity, with net take-up of +651,000 sq. ft., the fourth straight quarter of positive absorption, according to Colliers Q1 2026 report.

Performance was led by the Central / Admiralty submarket, which recorded +253,000 sq. ft. of net take-up, while overall territorial vacancy remained stable at 17.1%.

Rents in Central / Admiralty rose 3.5% quarter-on-quarter, supported by demand for Grade A1 buildings. In contrast, Kowloon East rents fell 1.2% QoQ, reflecting continued weakness in non-core areas.

Activity intensified around Kowloon Station following the completion of the International Gateway Centre (IGC). Insurance and financial firms expanded their footprint, securing multiple floors in newly available space.

JPMorgan Chase also pre-committed 250,000 sq. ft. at Artist Square Towers, relocating from The Quayside in 2028.

The report highlights ongoing “flight-to-quality” demand, as firms take advantage of lower rents to secure long-term leases in premium offices. This is widening the gap between core and non-core markets.

Looking ahead, core CBD assets in Central / Admiralty are expected to lead the recovery, supported by concentrated occupier demand and limited new supply. As a result, rents in these prime locations are projected to increase by around 5% in 2026.

Meanwhile, secondary and decentralised office stock is expected to remain under continued rental pressure due to weaker underlying demand fundamentals.