Central office rents surge 8% as Hong Kong Island slumps

Central premium towers defy the broader island decline with a projected 8% rental climb.

Premium Central offices could see rental growth of up to 8%, whilst Grade A office rents on Hong Kong Island are forecast to range from flat to a 5% decline in 2026, according to Knight Frank.

The consultancy said the Grade A leasing market on Hong Kong Island remains subdued, although demand has shown a slight improvement.

Rents continue to face downward pressure, and vacancy rates remain elevated, reflecting economic uncertainty and a cautious approach by occupiers.

Wendy Lau, executive director and head of Hong Kong office strategy and solutions at Knight Frank, said premium buildings in Central are beginning to outperform, with rents returning to positive growth, whilst traditional Central buildings remain under pressure.

She added that areas such as Causeway Bay and Quarry Bay have underperformed, with leasing demand led mainly by the finance sector and PRC enterprises. Future supply on Hong Kong Island, she said, remains a key concern for both rental trends and occupancy.

Looking ahead, Knight Frank expects a mixed outlook for 2026. Lau said larger occupiers may expand as they take advantage of flight-to-quality opportunities and the availability of large floorplates, whilst demand from PRC companies is expected to remain resilient.

She added that occupiers are increasingly seeking more flexible lease terms and placing greater emphasis on in-house amenities and functional space planning.