As Hong Kong’s commercial property market continues to evolve in 2025, both tenants and landlords are navigating a landscape shaped by economic uncertainties, shifting demand patterns, and evolving workplace needs. At Offices.com.hk, we provide a one-stop-shop solution for commercial properties in Hong Kong, offering a comprehensive list of listings to help businesses find the perfect space. In this article, we explore the latest leasing trends, market forecasts, and strategies for success in Hong Kong’s dynamic commercial property market.
Key Leasing Trends in 2025
According to JLL’s 2025 market report, the Grade A office market in Hong Kong is experiencing a flight-to-quality trend, with tenants increasingly seeking larger, more flexible spaces. This shift is driven by corporate consolidation activities and evolving workplace strategies, such as hybrid work models. Notably, 33% of new lettings in 2024 were for spaces exceeding 20,000 sq ft, reflecting a growing preference for premium office environments.
However, the market is also grappling with oversupply, particularly in Central and Kowloon East, where vacancy rates remain high. Overall Grade A office rents are projected to decline by 5-10% in 2025, presenting opportunities for tenants to upgrade their spaces at lower costs.
Retail and Industrial Sectors: A Mixed Outlook
The retail sector is witnessing a polarised recovery, with prime shopping districts like Causeway Bay and Tsim Sha Tsui showing resilience, while lower-tier streets struggle to attract tenants. According to CBRE’s 2025 outlook, retail rents are expected to decline by 0-5% in 2025, driven by weak domestic consumption and changing consumer habits.
In the industrial sector, e-commerce continues to drive demand for logistics spaces, particularly from mainland Chinese operators. However, trade tensions and global economic uncertainties are expected to weigh on leasing activity, with warehouse rents projected to edge down by up to 5% in 2025.
Strategies for Landlords and Tenants
For landlords, offering flexible leasing terms and incentives such as extended rent-free periods and customised fit-out allowances can help attract and retain tenants in a competitive market. Tenants, on the other hand, should leverage the current market conditions to negotiate favourable lease terms and secure premium spaces at reduced rates.
FAQs
1. What is the current vacancy rate for Grade A offices in Hong Kong?
As of 2024, the overall vacancy rate for Grade A offices in Hong Kong stands at 13.1%, with Central experiencing the highest vacancy due to new supply.
2. How are retail rents expected to perform in 2025?
Retail rents are projected to decline by 0-5% in 2025, with prime locations showing more resilience than lower-tier streets.
3. What sectors are driving demand for industrial spaces?
E-commerce operators, particularly from mainland China, are the primary drivers of demand for industrial and logistics spaces.
