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Hong Kong Office Leasing – June 2025

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Hong Kong Office Market Shows Signs of Recovery

  • IPO market recovery drives demand: Hong Kong's IPO market showed strong performance in early 2025, raising over HK$76.4 billion in the first five months. Full-year fundraising is projected to reach HK$150 billion, creating near-term opportunities for investment bank and professional services sectors.
  • Financial sector expansion fuels demand for premium space: Jane Street's pre-leasing of 223,000 sq ft at Phase 1 of Central Site 3 office reflects sustained demand from financial tenants for high-quality office space in core business districts.
  • Growing trend of end-user acquisitions: Institutions such as the SFC, HKEX, and Metropolitan University are actively purchasing office space for self-use, reducing leasing market supply. If this trend continues, it could generate an additional 400,000 sq ft of demand annually.
  • Supply will tighten after reaching its peak: While 6.7 million sq ft of new supply will enter the market between 2025-2028, new completions will sharply decline to 1.5 million sq ft from 2029-2032. This long-term supply constraint may push vacancy rates down to 6%, potentially leading to an earlier-than-expected rental recovery.

A recent resurgence in IPO activity and demand from the financial sector may stabilize the declining market, potentially leading to a rebound in rents once vacancy rates hit 6%. Furthermore, Jane Street's pre-leasing of 70% of Phase 1 of Central Site 3 could amplify the buy-side tenant "flight-to-quality" trend in Central, suggesting a rental recovery sooner than anticipated.

Jack Tong, Director of Savills Research & Consultancy
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