Written by Nelson Li, Head of IQI Hong Kong

Hong Kong’s office market showed a modest recovery in April 2025, with a net absorption of 39,700 sq ft, led by notable deals such as The Payment Cards Group Limited’s 12,100 sq ft lease in Tsimshatsui. While the overall vacancy rate remained stable at 13.7%, submarkets experienced mixed performance—vacancy rose in Central and Hong Kong East due to prior consolidations, while Wanchai/Causeway Bay, Tsimshatsui, and Kowloon East saw slight improvements. Office rents continued to decline for the 36th consecutive month, down 0.5% overall, with drops of 0.4% to 0.6% across key districts. In a significant transaction, HKEX purchased nine office floors and retail space in One Exchange Square for HKD 6.3 billion to establish its new headquarters.

The residential market saw a 6.1% month-on-month rise in transaction volumes in April, driven by a surge in secondary market activity, although primary sales dropped slightly to 1,614 units. Despite this, large project launches like Sierra Sea Phase 1A(2) sold out all 318 units on launch day, indicating solid demand. Mass residential capital values slipped 0.2% after a slight rebound in March.

Meanwhile, the one-month HIBOR dropped sharply to 1.35% by mid-May, easing mortgage repayment costs and potentially improving buyer sentiment. A standout luxury deal saw a high-floor unit at Opus Hong Kong sold for HKD 512 million, or HKD 94,048 per sq ft.