Hong Kong office deals surge as prices hit 60% below peak

Owner-occupiers and Southeast Asian funds are back but geopolitical risk and uneven recovery threaten the rebound.

Hong Kong’s commercial property market is drawing renewed buyer interest after deals surged 367% in Q1 2026, but the rebound remains concentrated in repriced office assets and exposed to interest rate and geopolitical risks.

Rosanna Tang, Executive Director and Head of Research at Cushman & Wakefield Hong Kong, said end-users and owner-occupiers have become the main drivers of office acquisitions. Between 2025 and Q1 2026, they accounted for around 75% of total office investment transaction volume, up from around 22% in 2018.

Tang said the shift reflects a steep correction in office values, which are down by over 60% from the last peak. “The current cycle presents a very timely opportunity for owner-occupiers to bottom-fish,” she said.

Reeves Yan, Executive Director and Head of Capital Markets at CBRE Hong Kong, said Central office prices once ranged from HK$50,000 to HK$60,000 per square foot, but are now mostly trading at HK$15,000 to HK$20,000. That 60% to 70% decline has created an entry point for investors and end-users. He said some end-users are buying to protect themselves from future rental increases.

Oscar Chan, Head of Hong Kong Capital Markets at JLL, said many self-use buyers now see prices as lower than replacement cost. Financial institutions and educational institutions are amongst the active buyers, with schools seeking long-term location stability.

The price reset is also bringing regional capital back. Yan said some APAC fund managers are looking again at Hong Kong as interest rates stabilise and yields rise, whilst Chan said Southeast Asian investors are attracted by cheaper assets and properties that were previously unavailable for sale. Tang said the rebound signals a possible re-entry point into a deeply repriced gateway market.

Risks could still slow momentum. Chan cited political instability, oil prices, inflation and high interest rates. Tang said recovery is stronger in core CBD areas than decentralised submarkets, whilst Yan said US-China tensions and Middle East conflict remain threats to sentiment.