Hong Kong’s latest office landmark nearly full as segment upturn simmers

The newest landmark office tower in Hong Kong’s main business zone is nearing full occupancy a year and a half after it welcomed its first tenants, suggesting improving fortunes in the city’s office property segment.\nThe Henderson – the prime commercial development and namesake tower for one of Hong Kong’s largest developers – reached 90 per cent occupancy recently, Henderson Land said on Friday.\nThe 36-storey building in Central counts among its tenants auction house Christie’s, alternative investment firm Point72, secondary private assets market investor Coller Capital and growth equity firm General Atlantic. Hedge fund firm Aeonea, investment management company Cohen & Steers, law firms Akin Gump Strauss Hauer & Feld and Nishimura & Asahi, and luxury watchmaker Audemars Piguet had also leased space in the building, the developer added.\nThe building’s success reflects improving prospects in Hong Kong’s struggling office property segment, which has been hobbled by oversupply over the last few years.\nLast year, net take-up of office space reached 1.73 million sq ft, the most since 2018, according to Colliers. The Central-Admiralty area and Kowloon West led the recovery with take-up of 400,000 sq ft and 227,000 sq ft, respectively, the property consultancy added. However, overall vacancy rates last year increased to 17.5 per cent from 16.8 per cent in 2024, it said.\nGrade A office rents last year were down 41 per cent from a peak in the first quarter of 2019, according to CBRE. But prime office rents slowed their decline in the second half of the year – to 1.1 per cent from 4.7 per cent in the first half – despite an additional 3 million sq ft of new office supply during the year, according to Colliers. The slowing decline in rents had continued into this year, property agents said.\n“The rental downcycle is nearing its end,” said Fiona Ngan, head of occupier services at Colliers Hong Kong. “While recovery will be uneven, premium central business district assets are well positioned for modest gains as businesses capitalise on attractive rents.”\nOffice rents were expected to fall by 3 per cent this year, narrower than the 5.8 per cent decrease in 2025, even though more than 2.8 million sq ft of office space was expected to be completed, Colliers said.\n“The market will need time to absorb the significant new supply – over 1.24 million sq ft in 2026 and 1.58 million sq ft in 2027 – which will keep competition elevated,” Ngan said.\nWith Hong Kong’s aggressive bid to become a leading global wealth hub, banking and finance firms are poised to drive leasing activities.\n\nAres Management, one of Asia’s largest alternative investment managers, is set to double its footprint in Hong Kong, adding about 12,500 sq ft of space in Gloucester Tower in Central, according to landlord Hongkong Land. The new lease will be effective in March.\nUS quantitative trading firm Jane Street Asia in June agreed to lease 223,437 sq ft for HK$30.6 million (US$3.93 million) a month at Central Yards, Henderson Land’s under-construction mixed-use development at the New Central Harbourfront.\nHedge fund Qube Research & Technologies signed a lease last month for 146,000 sq ft spread across six floors, making it the largest private tenant at Two International Finance Centre.\n“2026 is expected to be a year of divergence,” with demand distributed unevenly among areas and sectors, said Sam Gourlay, head of office leasing advisory in Hong Kong at JLL.\n“The recovery will continue to be led by financial services firms, with Central’s office market benefiting most. We forecast Central rents to rise by 0 to 5 per cent, while rents in the overall market may drop by a further 0 to 5 per cent. Overall vacancy rates are likely to plateau at 15 per cent due to abundant supply offsetting the increased demand.”\nCheung Kong Center II (CKCII), a 41-storey skyscraper in the Admiralty-Central district, has yet to fill a significant portion of its space. In May, property agents estimated that CK Asset’s latest office tower was just 20 per cent occupied.\n“CKCII is still not where we’d like it to be,” said Simon Ma, general manager at CK Asset, in an analyst briefing in August. “It is a very competitive market for commercial office properties, with supply greater than demand and more supply in the next few years. We hope we will make some progress soon.”\nCK Asset did not immediately reply to a request for additional comment.\n