Hong Kong’s prime office market showed signs of improvement in May as the overall vacancy rate fell to its lowest level in seven months. The decline was driven by growing demand in districts near Central, where premium office space has become increasingly limited.
According to the latest market report from property consultancy JLL, the overall prime office vacancy rate dropped to 13.3 per cent at the end of May. This was down from 13.5 per cent recorded in April.
The improvement comes as businesses continue to look for high-quality office space in key commercial areas. With premium offices in Central nearing full occupancy, many companies have expanded their search to nearby districts such as Wan Chai and Causeway Bay.
Vacancy rates in Wan Chai and Causeway Bay fell to 9.8 per cent in May from 10.4 per cent in April. This marked the lowest vacancy level in the area in 10 months. The district also recorded strong leasing activity, with net absorption reaching 98,600 square feet. It was the highest monthly figure since April 2024.
Market analysts said demand from tenants unable to secure space in Central helped support the improvement. As available office space becomes harder to find in the city’s main financial district, neighboring areas are benefiting from increased interest.
Central’s grade A office vacancy rate remained stable at 9.2 per cent during May. Despite economic uncertainties, the district continues to attract financial institutions and professional service firms seeking premium office locations.
The broader office market also posted positive results. Hong Kong recorded net absorption of 205,000 square feet of office space during the month. Positive net absorption means more office space was occupied than vacated, a sign of improving leasing activity.
Demand from securities firms played an important role in the market’s performance. Several major financial companies signed significant leasing agreements during the month.
Citic Securities leased an entire floor measuring about 18,000 square feet at Citic Tower in Admiralty. Meanwhile, Ping An Securities secured approximately 14,900 square feet at The Center in Central.
These transactions helped strengthen leasing momentum and contributed to the reduction in vacant office space across key business districts.
The rental market also showed modest growth. Overall grade A office rents increased by 0.3 per cent in May compared with the previous month. While the increase was relatively small, it indicated improving confidence in parts of the commercial property market.
Central led rental growth among major office districts. Rents in the area rose by 0.7 per cent during the month, reflecting continued demand for premium office locations. Wan Chai and Causeway Bay also recorded rental increases, with average rents rising by 0.3 per cent.
Property experts noted that many occupiers remain focused on newer buildings and higher-quality office space. Modern facilities, better amenities, and improved environmental standards continue to attract tenants despite broader market challenges.
Hong Kong’s office sector has faced pressure in recent years due to economic uncertainty, changing workplace trends, and an increase in available commercial space. However, recent leasing activity suggests that demand remains healthy in prime business locations.
Industry observers believe continued interest from financial institutions and professional firms could help support the market in the coming months. Areas surrounding Central may continue to benefit as companies search for quality office space at competitive rental levels.
The latest figures indicate that Hong Kong’s office market is showing gradual signs of recovery. While vacancy rates remain elevated compared with historical levels, stronger leasing demand and modest rental growth offer encouraging signals for the city’s commercial real estate sector.
