Colliers: Central office buildings lead the pace of recovery and recorded more than 500,000 square feet of additional absorption in the first eight months of the market

The Zhitong Finance App learned that Colliers published a research report “Reshaping Central: Why the Office Market Is Returning to the Core Business District”, pointing out that the pace of recovery in the Central Office Market is clearly leading the overall market, mainly benefiting from the recovery of the capital market, the expansion of the financial services industry, and the continued increase in demand for high-quality office buildings. According to the report, Central Bank regained its growth momentum in 2024, with a total net absorption of about 612,000 square feet between 2024 and 2025, and recorded an additional absorption of more than 500,000 square feet in the first eight months of this year.

Meanwhile, the performance of the Central Market also continued to outperform the overall Grade A office market. The vacancy rate fell from 15.1% in December 2024 to 9.9% in August this year, significantly lower than the 15.8% vacancy level of Grade A office buildings in Hong Kong.

In terms of rents, rents in Central China increased by 8.7% in the first eight months of this year, while rents for top Grade A offices rose 15.4%, far higher than 0.3% of the overall Grade A office market. The leasing performance of a number of indicative commercial buildings was particularly outstanding. Among them, the first and second phases of the International Financial Center were almost fully leased out in June, and The Henderson's occupancy rate in August was over 90%.

Another report, “Hong Kong Office Tenant Survey 2026,” shows that business confidence has returned to a positive level. 41% of respondents expect the business environment to improve in the next 12 months, while only 16% expect the situation to decline.

Although 35% of tenants expect to increase the number of employees in the coming year, only 20% plan to expand office space. Among them, professional services and banking and finance are most likely to expand, reflecting that the gap between corporate recruitment intentions and office space requirements is gradually widening. Many companies absorb growth demand within existing offices by making more effective use of existing space and adjusting workplace strategies. Cost remains the most important consideration in leasing decisions. Whether choosing a commercial building or location, rent level is the primary consideration, followed by building quality and transportation convenience.

The survey also found that 68% of surveyed tenants plan to renew their existing office leases, reflecting that leasing activity in the market is still dominated by rent renewals. Among the major office districts, tenants in Tsim Sha Tsui and Kowloon East had the highest intention of staying in the area. 88% and 87% of respondents, respectively, indicated that they would prefer to stay in the original area after the lease expires.