CBRE: The vacancy rate of Hong Kong's Grade A office buildings is expected to rise to nearly 18%, or rents will drop by about 3% in 2026

The Zhitong Finance App learned that according to the “2026 Hong Kong Commercial Real Estate Market Outlook” report released by CBRE, the leasing momentum of Hong Kong's Grade A office buildings is expected to improve further in 2026, yet the vacancy rate may rise further to close to 18%, and rents may drop by about 3% throughout the year, providing tenants with more bargaining space.

Chen Jinping, head of CBRE's Hong Kong research department, said it is expected that office leasing momentum will further increase, continue into the new year as the Hong Kong financial market momentum continues, and encourage tenants to choose a “pursuit of quality” relocation strategy. Furthermore, the continued influx of students and professionals will inject momentum into the housing market.

The bank anticipates that retail and office sectors in some core areas will record growth, and investor sentiment is expected to increase as financing costs fall.

On the retail side, Wen Yunqiang, senior director and head of CBRE Hong Kong's retail leasing department, said that since a large number of leases signed in 2023 are about to expire, the leasing speed is expected to increase further. The experiential concept and cooperation between landlords and tenants will be the key to attracting consumption. The low vacancy rate of some core street stores is expected to drive rents to record another 5%-7% increase in 2026, while retail rents in non-major core areas are expected to remain low to medium single-digit declines.

In terms of industry and logistics, Lai Sheung-man, executive director and head of CBRE's Hong Kong Industry and Logistics Department, said that looking ahead to 2026, although some companies will still pay attention to cost control, the bank expects leasing demand to gradually improve, mainly driven by pre-leasing of emerging industries and high-standard facilities, prompting some tenants to choose to rent high-quality industrial properties. The bank expects leasing demand to gradually pick up, activity in emerging industries to increase, and warehouse rents to fall by another 5% in 2026.

On the capital market side, Zhen Junmin, executive director and head of CBRE Hong Kong's capital markets department, said that looking ahead to 2026, further interest rate cuts are expected to drive demand, institutional investors will gradually return, and mainland capital is still active. The bank expects accommodation assets and corporate headquarters to be the focus, and predicts a moderate increase of around 5% in 2026.