Written by Nelson Li, Head of IQI Hong Kong

Hong Kong’s office market recorded positive momentum in August 2025, with net absorption reaching 313,800 sq ft—driven by rising demand from IPO activity and wealth management tenants.

Central and Tsim Sha Tsui led the improvement, with vacancy rates tightening to 11.2% and 7.6% respectively.

Although overall office vacancies nudged up to 13.5% due to new supply from One Causeway Bay, the rental decline has started to slow.

Average monthly office rents fell by just 0.2%—the smallest drop in 2025—with the sharpest decreases in Hong Kong East (-0.6%) and Kowloon East (-0.3%).

Central saw only a 0.1% decline. A notable deal included a full-floor acquisition at International Enterprise Centre Phase 1 for HKD 71.8 million. 

The residential sector saw a slowdown in transactions, with total sales volumes falling 8.2% month-on-month to 5,291 units.

The primary market contributed 1,781 units, while the secondary market accounted for 3,510. Mass residential capital values declined by 0.5% in August, reflecting continued volatility.

Despite the softening, market activity remains healthy: July mortgage applications rose 4.9% month-on-month, with loan approvals surging 11.2% to HKD 30.6 billion.

The Headland Residences Phase 1 saw a 47% absorption rate on launch day, while the luxury market made headlines with the sale of a penthouse at 1 Gough Hill on The Peak for HKD 1.09 billion—setting a new record at HKD 95,014 per sq ft.