Office vacancy rate in Hong Kong’s Central drops to single digits after 2 years

Prime office vacancy rates in Hong Kong’s main business district dropped to single digits for the first time in 26 months, lifting overall rents in the city’s struggling office property market, according to JLL. The vacancy rate in Central for premium offices fell to 9.9 per cent in February from 10.1 per cent the previous month, the property consultancy said. The last time a single-digit rate was recorded for grade A offices in the district was in December 2023, when it also hit 9.9 per cent, according to JLL’s data. The citywide prime office vacancy rate also inched down to 13.4 per cent in February from 13.5 per cent a month earlier, with the Wan Chai and Causeway Bay area recording a decrease to 10.2 per cent from 10.3 per cent in its third straight month of falling rates. Given the improvement, Central’s grade A office rents rose 3.5 per cent in the first two months of the year, after rising 1.2 per cent in January and 2.3 per cent in February, JLL said. This increase supported a 1.1 per cent month-on-month rise in overall office rents in February, the company said. “With the banking sector remaining the primary driver of leasing activity, and demand focused on new office buildings in core business districts, only two districts have shown early signs of improvement,” said Alex Barnes, managing director of JLL in Hong Kong, Macau and Taiwan. “This trend is expected to persist throughout the year, while noncore districts such as Kowloon East are likely to remain under pressure,” Barnes said. CK Asset Holdings, the property developer of the family of billionaire Li Ka-shing, has also expressed optimism about office leasing demand this year. “Leasing remained under pressure last year, but recent renewals had begun to see low single-digit rental increases,” said Justin Chiu Kwok-hung, executive director at the company, at its results briefing on Thursday afternoon. With a total investment property portfolio of about 22.4 million sq ft, CK Asset has 3.9 million sq ft of rental office space in Hong Kong, according to its latest annual report. It reported that it earned HK$1.75 billion (US$223 million) in office rental for all its office assets, including in mainland China, in 2025, lower than the HK$1.78 billion in the previous year. “We expect rental and sales prices for overall non-residential properties to continue adjusting and to keep seeking support levels,” said David Ma, CEO at Midland Holdings and Midland IC&I. “However, rental and sales prices for core district offices may stabilise first.” Meanwhile, vacancy rates edged up 0.3 percentage points to 7 per cent in Tsim Sha Tsui and by 0.2 percentage points to 19.4 per cent in Kowloon East, compared with January, JLL said. In Hong Kong East, vacancy was unchanged at 12.8 per cent. “Vacancy rates across most submarkets, with the exception of Central and Wan Chai-Causeway Bay, remained broadly stable or edged up slightly,” said Cathie Chung, senior director of research at JLL. “Fringe districts such as Kowloon East continued to face downward rental pressure despite already being at record-low rental levels.” Additional reporting by Peggy Ye