Hong Kong Office Rents Down 42% From 2019 Peak After Q1 Slide: C&W

Grade A office rents in Hong Kong dipped to HK$43.90 ($5.66) per square foot per month during the first quarter of the year, marking a 42.2 percent decline from their peak in the same quarter of 2019, according to Cushman & Wakefield.

The quarterly drop of 2.5 percent came as the citywide availability rate jumped 19.2 percent from the last three months of 2024, driven by 352,800 square feet (32,776 square metres) of fresh supply from The Cendas, SEA Group’s newly completed office complex in Kowloon East, the consultancy said in its Marketbeat Hong Kong report.

With roughly 3 million square feet of new supply expected to enter the office market in the coming three quarters of 2025, the already competitive leasing environment is likely to intensify, said John Siu, managing director for Hong Kong at Cushman & Wakefield.

“We expect the overall average office rental level to remain under pressure, with a decline of 7 to 9 percent throughout 2025,” Siu said.

Central Out Front

Grade A tenants took up more office space than they gave up for a sixth straight quarter, yielding a positive 143,700 square feet in terms of net area leased, according to the report.

Hong Kong’s core districts were the most sought-after by occupiers in the January-March quarter, with Greater Central — defined as Central district along with Admiralty and the Sheung Wan area just west of the primary hub — accounting for 34 percent of the 790,200 square feet of new leased space in the period.

Rents in Greater Central slid 3.2 percent from the prior quarter to HK$77.20, while those in Prime Central — a set of key buildings in the main office district — eased a milder 2.1 percent to HK$89.80.

Greater Tsim Sha Tsui saw the lightest rent decline among submarkets, with the Kowloon commercial hub recording a 0.7 percent dip to HK$42.30. Wan Chai/Causeway Bay rents fell 2 percent to HK$46.00.

Finance on the Move

Relocation and expansion activity by banking/finance and insurance occupiers drove new leasing in the first quarter, with the two sectors accounting for 46 percent of new leased area, per Cushman & Wakefield.

Notable leasing transactions in the quarter included US hedge fund Point72 taking up 49,500 square feet of net floor area across four floors at Henderson Land’s The Henderson on Murray Road in Central.

The deal makes billionaire Steve Cohen’s firm the biggest tenant at The Henderson after British auction house Christie’s and US private equity giant Carlyle Group booked an estimated 70,000 square feet and Swiss watchmaker Audemars Piguet committed to a full floor measuring 12,000 square feet.

Among the quarter’s other large commitments, Ralph Lauren Sourcing leased 45,500 square feet of net floor area at 83 King Lam Street in Kowloon’s Cheung Sha Wan area and HSBC secured 20,000 square feet at the International Commerce Centre in West Kowloon.