Central set to outperform as Hong Kong Island office rents grow
Finance-led demand and occupier upgrades may sustain Central’s premium, while excess supply and competition could continue pressuring decentralised districts, particularly Causeway Bay.
Central office rents rose 9.9% year-to-date in H1 2026, with Knight Frank forecasting 8% to 12% growth for the full year.
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Overall Hong Kong Island Grade A office rents are expected to rise by 1% to 5% in 2026.
Hong Kong Island's Grade-A office market remains sharply divided, with premium CBD locations continuing to outperform despite elevated vacancies elsewhere, according to Knight Frank.
Knight Frank said Central recorded a 9.9% year-to-date increase in rents in the first half of 2026, underpinned by strong demand for high-quality office space. However, higher vacancy rates persist across several districts as substantial new supply enters the market.
Wendy Lau, Executive Director and Head of Hong Kong Office Strategy & Solutions at Knight Frank, said leasing demand continues to be driven by the banking and finance sector, particularly securities, private wealth and asset management firms. Co-working operators also played a significant role, accounting for 18% of first-quarter take-up through several large transactions, mainly in Central.
Knight Frank said PRC enterprises and start-ups remain key drivers of co-working demand, while occupiers are increasingly upgrading to larger, higher-quality premises and are also exploring office acquisitions for owner occupation.
Looking ahead, Knight Frank forecasts overall Hong Kong Island Grade-A office rents will rise by 1% to 5% in 2026, with Central expected to outperform through growth of 8% to 12%. Decentralised districts, particularly Causeway Bay, are expected to remain under pressure due to strong competition and excess supply.