.jpg "Savills")
Office Market Demand is Recovering, with Financial Recovery and Policy Initiatives Emerging as New Growth Drivers
- Prime Grade A Offices in Central Remain Highly Sought After, with Rents Steadily Rebounding: Small to medium-sized hedge funds and quantitative funds are actively looking for spaces of 1,500 to 5,000 square feet in Central’s core, driving demand for landmark buildings such as IFC, AIA Central, and Chater House, where rents remain at HKD 110–130 per square feet.
- Secondary Locations Face Competitive Pressure, with Rents Continuing to Decline: Office rents in Central’s secondary locations generally range from HKD 40 to 60 per square feet, facing direct competition from high-quality Grade A offices in Causeway Bay and West Kowloon. Some financial tenants are considering relocating to these surrounding districts.
- Active End-User Acquisitions Effectively Reduce Market Supply: The 2025 financial year saw several major self-use transactions, with institutions such as HKUST, the Law Society of Hong Kong, and the Employees Retraining Board collectively absorbing over 430,000 square feet. Their long-term holding strategies help halt the market's continued decline.
- Government Policies Drive Relocation Demand, Benefiting Grade A Offices: New policies allowing commercial buildings to be converted into student accommodation are expected to generate 845,000 square feet of annual relocation demand, about half of which will be absorbed by Grade A offices in the area, providing fresh impetus for market recovery.
- Strong IPO Market Recovery Boosts Demand for Financial Services: Hong Kong reclaimed the top spot globally for IPO fundraising in the first half of 2025, raising over HKD 107.1 billion. This is expected to create significant opportunities for investment banks and professional service firms, further supporting demand for office space in core districts.