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CBRE Expects Overall Grade A Office Rents to Fall Up to 3% This Year, Core District High Street Shop Rents Seen Rising 5%-7%
CBRE stated that despite ongoing macroeconomic and geopolitical uncertainties, Hong Kong's real estate market demonstrated clear resilience in 1Q26. Leasing activity across major s...
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CBRE Expects Overall Grade A Office Rents to Fall Up to 3% This Year, Core District High Street Shop Rents Seen Rising 5%-7%
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CBRE stated that despite ongoing macroeconomic and geopolitical uncertainties, Hong Kong's real estate market demonstrated clear resilience in 1Q26. Leasing activity across major sectors slowed due to seasonal factors, but professional investors turned more active during the quarter, reversing the trend seen in previous quarters.

Chan Kam-ping, Head of Research, Hong Kong at CBRE, said market confidence across multiple sectors has improved, mainly supported by stronger fundamentals in the local financial market, a recovery in leasing demand from traditional and emerging industries, and the return of professional investors. This is expected to support a gradual and sustainable recovery in the medium term.

Fung Wai-sze, Chief Operating Officer of Advisory & Transaction Services, Hong Kong at CBRE, noted that although leasing momentum slowed in 1Q26 due to seasonal factors, some submarkets continued to record strengthening tenant demand for high-quality office space. Banking and financial services institutions were particularly active, actively pursuing relocations and upgrades. Net absorption remained positive for the fourth consecutive quarter, reflecting solid demand for premium office space. Rents for Grade A1 office buildings in Central recorded the most significant quarterly increase since 3Q10, as vacancy rates stayed at low single-digit levels. Looking ahead to the next two quarters, leasing transaction volumes are expected to rebound further from 1Q26, supported by continued expansion in the local wealth management and insurance sectors.

Fung projected that overall Grade A office rents in 2026 will decline by 1% to 3%, while rents in Greater Central and Greater Tsim Sha Tsui are expected to rise by 1% to 3% against the broader market trend.

Wendy Wan, Executive Director and Head of Retail Services, Hong Kong at CBRE, said that despite ongoing economic headwinds, Hong Kong's retail and tourism markets have shown strong resilience. Consumption patterns in Hong Kong are increasingly experience-driven, supporting low vacancy rates on prime high streets in major retail districts. Coupled with the trend of northbound consumption, Hong Kong consumers' acceptance of Mainland brands continues to rise. In addition to the rapid expansion of Mainland catering and electric vehicle brands in recent years, more Chinese fashion, beauty and financial services brands are actively exploring retail opportunities across different districts in Hong Kong.

Wan forecast that rents for high street shops in core districts will increase by 5% to 7% this year, while rents in major shopping malls are expected to grow by 0% to 5%.

Samson Lai, Executive Director and Head of Industrial & Logistics, Hong Kong at CBRE, noted that uncertainties in global trade and rising oil prices have prompted logistics operators to adopt a more cautious stance on operating costs, and leasing sentiment is expected to remain prudent in the coming months. However, to support long-term business development and enhance operational efficiency, demand for upgraded facilities will persist, continuing to drive demand for high-specification warehouses. Such demand is less susceptible to short-term market volatility, particularly that generated by e-commerce operators.

Gilbert Chun, Executive Director and Head of Capital Markets, Hong Kong at CBRE, said there are signs that professional investors are gradually returning to the market. If the trend continues, investment transaction volumes are expected to rise further. In addition to opportunistic demand from local end-users and long-term investors for heavily discounted assets, professional investors, including some real estate funds, are closely monitoring growth opportunities in the education sector. Market interest in hotels and residential projects that can be converted into student accommodation, as well as other commercial properties legally permitted for educational use, is increasing, and this trend is expected to continue throughout the year. (sl/da)



This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation.

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