Colliers: Central Grade A office rents outperform the market; bullish on West Kowloon's locational advantages in attracting Chinese enterprises to set up operations

Central Grade A office leasing was active this year. Colliers said corporate expansions were mainly concentrated in the core districts, so Central Grade A office rents significantly outperformed the market, and the outlook remains positive. The firm is also bullish on West Kowloon's advantage of having the high-speed rail station, which attracts Chinese enterprises to set up operations. Colliers' latest research report, "Reshaping Central: Why the Office Market Is Returning to the Core Business District," shows that the recovery of Central's office market is clearly ahead of the overall market, mainly benefiting from a rebound in the capital market, expansion of the financial services sector, and continued growth in demand for quality office space. Central regained growth momentum in 2024, with net absorption totaling about 612,000 sq ft between 2024 and 2025, while the first eight months of 2026 recorded more than 500,000 sq ft of new absorption. Meanwhile, Central's market performance also continued to outperform the overall Grade A office market. The vacancy rate fell from 15.1% in December 2024 to 9.9% in August 2026, significantly below the 15.8% vacancy level for Grade A offices across Hong Kong. Central rents rose 8.7% cumulatively in the first eight months of 2026, while top-tier Grade A rents rose 15.4%, far above the 0.3% increase in the overall Grade A office market. Several landmark office towers, including IFC Phase 1 and Phase 2, are almost fully leased, while The Henderson's occupancy rate has also exceeded 90%. Lam Tsz Ming, Head of Hong Kong Commercial Property Services, Island Commercial at Colliers, believes that a series of government measures to attract investment, together with the establishment of private equity funds and family offices supported by tax incentives, have boosted leasing demand. Even though there have been capital control measures in the mainland in recent months involving securities and insurance, Yen Wai Ping, Head of Corporate Client Services at Colliers Hong Kong, said related industries have not slowed their expansion. For example, at Tsim Sha Tsui's Gateway Towers, where the insurance industry is concentrated, "there are no available sea-view units at all." On rents, he said landlords are still relatively restrained at this stage and have not raised rents sharply, generally by 8% to 10%. "Rents are still nearly 30% away from the peak, so they are not too aggressive now."