Savills

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Hong Kong Office Leasing - September 2024

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Contacts & Related Research

 

Hong Kong Office Market Faces Unprecedented Challenges and Transformation

  • Record-high vacancy rates surpass those of SARS and 2009 Global Financial Crisis, with Central experiencing 2.2 million square feet of net vacant area.
  • A surplus of 10.6 million square feet of office space across districts contributed by multiple macroeconomic factors, including economic underperformance and high interest rates
  • Rental prices have decreased by 40% from the 2019 peak due to intense market pressure on landlords.
  • Recentralisation of financial institutions to prime CBD locations as rental differentials narrow between prime and non-prime areas.
  • Office vacancy rate projected to reach 17% by 2027, with rents likely to continue declining in the short term, potentially moderated by imminent US rate cuts.

The impact of high interest rates and changes in tenant preferences have reshaped the office leasing landscape, leading to a historical high office vacancy rate and continuous decline in rents

Jack Tong, Director of Savills Research & Consultancy
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