Hong Kong's Central district office market has turned a corner after seven years of decline, fueled by a surge in capital market activity and demand from top Chinese tech firms and global financial institutions.
JD.com purchased a 50% stake in a Central office tower for $450 million last December. In Causeway Bay, Alibaba and Ant Group acquired 13 floors of Mandarin Oriental’s new flagship building for $925 million.
Major financial players including J.P. Morgan, Northern Trust, IMC Group, and Jane Street have expanded their footprints this year. Jane Street’s six-floor lease in June was among the largest in Central in decades.
Rents rose 3.5% in early 2026, while vacancy in Central fell to 9.9%, compared to 13.4% citywide and 19.5% in Kowloon East. Transacted prices in Grade-A Central offices rose 5% since late 2025.
Hedge funds, though occupying less than 2% of total space, generated 18% of net demand last year. Firms like Futu and E Fund also drove leasing activity.
Analysts warn the recovery is concentrated - only select Grade-A towers are seeing strong demand. Oversupply persists elsewhere, and foreign corporate buyers remain scarce.
"We’ve passed the peak of oversupply," said CBRE’s Reeves Yan. "Now, it’s a landlord’s market. Quality space is being fought over."
New supply over the next five years is expected to be half the volume of the prior five years.