13.40% — down from 15.2% cycle peak (Jun 2025)
Central outperforming at 9.9% — tightest since Q4 2023
Kowloon East remains soft at 20.3% — KTSP supply still absorbing
Net absorption positive in 4 of last 6 months
Watch: ~2.8M sf new supply in pipeline through 2027
Central office market finds a floor: first $10B+ deal since 2019 signals institutional re-entry
Henderson Land's partial disposal of its flagship Central tower marks the first institutional-scale office transaction above $10B since the pandemic. The implied valuation of HK$45,200/sf represents a ~15% discount to original development cost.
Read-through: Validates institutional appetite for HK core office — but only at a discount. Buyer betting on Central vacancy tightening (now 9.9%). Sets pricing benchmark above distressed but below replacement cost.
The buyer, a Middle Eastern sovereign wealth fund, is understood to have secured a yield-on-cost of approximately 3.8%, competitive relative to current HIBOR levels and reflecting a medium-term view on Hong Kong office recovery.
Watch: Whether this triggers more prime disposals. CK Asset and Swire both have Central assets rumoured for partial sale. A second large-format deal within 6 months would confirm the re-pricing thesis.
| District | Vacancy | QoQ Δ | NER (HK$/sf) | QoQ Δ |
|---|---|---|---|---|
| Central | 9.9% | ↓0.3pp | $78 | ↑1.2% |
| Wan Chai / CWB | 14.1% | ↓0.2pp | $49.8 | ↑0.6% |
| TST | 16.8% | ↓0.1pp | $54 | ↑0.9% |
| Island East | 16.2% | ↑0.3pp | $38 | ↓0.5% |
| Kowloon East | 20.3% | ↓0.4pp | $22.5 | ↑0.2% |
Swire Properties delays handover by 6 months; 1M sf to hit Island East submarket.
Application filed for change of use; 120K sf prime Central site could yield 85 luxury units.
Full-year results show reversionary potential of +8-12% on expiring leases in Landmark portfolio.
50% rates rebate for first 3 years for tenants relocating to San Tin Technopole commercial zone.
HK$800M capex upgrade targeting Grade A repositioning; 350K sf Mongkok tower re-leasing at $35/sf.
•CCL at 142.3 — up 4.2% from Nov 2025 trough but still 22% below 2021 peak
•Transaction volume recovering but below 10-year monthly average of ~5,200
•Stamp duty cuts in Oct 2024 appear to have put in a floor