Six-Fold Hong Kong IPO Increase Seen Boosting Central Office Rents 

Hong Kong continued to be the world’s hottest IPO market in the first quarter of this year, with a sixfold increase in funds raised from a year earlier boosting office demand in the city’s financial core.

Total funds raised from initial public offerings on the Hong Kong stock exchange from January through March reached HK$109.9 billion ($14 billion), up 489 percent year-on-year, driven by market debuts and secondary listings for mainland Chinese firms, according to KPMG’s latest research report released Thursday. 

Nearly 30 percent of the IPO proceeds during the first quarter came from the HK$12.1 billion debut of Henan pork processor Muyuan Foods, a HK$11.1 billion listing for Shenzhen energy drink maker Dongpeng Beverage and another HK$8.1 billion came from Shanghai chip design firm Montage Technology, according to KPMG.

“The number of IPOs has proven to be a leading indicator for new office leasing demand in Hong Kong,” Marcos Chan, head of research at CBRE Hong Kong, told Mingtiandi.

“A higher level of IPO activity typically leads to increased demand for office space. Newly listed companies often expand or upgrade their offices, while other financial and professional services firms also benefit from improved business prospects, resulting in a need for more space,” he said.

Central Rents Rebound

The city’s IPO market accounted for 35 percent of global IPO proceeds in the first quarter, up from 20 percent in the full year of 2025 when the HKEX reclaimed the world’s top spot, according to KPMG. Analysts see the market surge helping to fuel a further recovery in the city’s office market.

The listing boom has helped drive a number of new leases in trophy towers around Hong Kong’s stock exchange, including quantitative trading firm Point72 taking up another 30,000 square feet (2,787 square metres) at Henderson Land’s The Henderson in Central in February after leasing 55,000 square feet last year, according to Centaline. 

Also this year, local investment firm E Fund Management expanded its presence in Two IFC in Central and US banking giant JP Morgan signed a deal to move much of its team from Kowloon East to a new Sun Hung Kai Properties project located one MTR station from the stock exchange in West Kowloon.

Driven by a recovery in demand, Grade A office rents in Central climbed 3.5 percent in the first two months of 2026, while vacancy tightened for the third straight month to 9.9 percent in February, JLL data showed. That compared with citywide vacancy of 13.4 percent and 19.5 percent in Kowloon East.

Record IPO in Pipeline

With companies having submitted a multi-year high of 366 active applications for listings on the Hong Kong exchange, KPMG expects Hong Kong’s IPO market to remain strong throughout the rest of the year.

“This is likely to improve leasing momentum in the upcoming quarters,” said CBRE’s Chan, adding that the recovery may remain uneven, with rents expected to rise in core areas while a glut of supply in other areas will continue to drag on leasing rates in those locations.

“Financial firms generally cluster in Central and are increasingly expanding their footprint in Tsim Sha Tsui West. As a result, buildings in these prime submarkets are expected to experience improved occupancy rates and higher achievable rents. In contrast, decentralized submarkets will continue to face challenges, as it takes longer to absorb vacant space,” said Chan.

Savills forecast in a report last month that rents at prime office buildings in Central, including the IFC complex, Chater House, AIA Central and The Henderson, as well as Sun Hung Kai’s ICC in Tsim Sha Tsui, will rise 5 percent to 7 percent in 2026. 

Rates at lesser properties in these core areas, and in Admiralty district east of Central, are expected to rise up to 3 percent this year while those at office buildings in other areas of the city are expected to fall between 5 and 7 percent, according to the agency’s research.