Hong Kong’s real estate market remained under pressure in the first quarter of 2025, as rents and capital values declined across most segments amid soft demand and elevated supply.
Despite this, leasing activity in the office, retail, and residential sectors held firm, according to JLL’s latest Preliminary Market Summary.
Market sentiment remains cautious as investors adopt a wait-and-see approach, driven by uncertainty over US-China trade tensions and interest rate movements.
Analysts noted that whilst broader macroeconomic impacts are still unfolding, early signs suggest increased stress in certain commercial sectors.
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The office sector posted a negative net absorption of 143,400 square feet in Q1, largely due to previously vacated spaces returning to the market.
Overall office vacancy rose to 13.7%, with vacancy in Kowloon East increasing to 21.3% from 18.6%, the steepest amongst districts. In contrast, core districts such as Central and Tsimshatsui saw modest improvements in occupancy.