A market recovery, but not a uniform one
At the start of 2026, Hong Kong’s Grade-A office leasing market showed clear signs of improvement. In December 2025, the market recorded 537,000 sq ft of positive net absorption, marking the ninth consecutive month of expansion, according to JLL’s Monthly Market Dynamics.
That momentum continued into January 2026, when Grade-A office leasing recorded 589,700 sq ft of positive net absorption, supported by robust financial sector demand and renewed interest in core locations. Central’s vacancy rate fell to 10.1% at end-January, its lowest level since 2023, and down from a peak of 12.2% in September 2024.
By February, the Grade-A office leasing market recorded another 143,700 sq ft of positive net absorption, with the banking sector remaining a key source of activity. Notable transactions included Standard Chartered Bank leasing 21,400 sq ft at One Causeway Bay and Rabobank securing 15,600 sq ft at One IGC in West Kowloon.
However, the market’s recovery became more uneven in March. Overall Grade-A vacancy edged up to 13.5% at end-March, as multiple whole-floor units in Kowloon East returned to the market following lease expirations, resulting in negative net absorption of 119,200 sq ft for the month.
By April, positive absorption returned, but only modestly. The office leasing market recorded 8,000 sq ft of positive net absorption, with gains in core locations offsetting negative absorption in fringe submarkets. The overall vacancy rate remained stable at 13.5% at end-April 2026.
The message for tenants is clear: Hong Kong’s office market is recovering selectively, not uniformly.
Central is leading the recovery
Central has been the standout performer in 2026 so far. JLL reported that Central Grade-A office rents rose 3.5% in the first two months of 2026, following monthly increases of 1.2% in January and 2.3% in February.
This rental growth has been supported by improving occupancy. Central’s vacancy rate fell from 11.0% at end-December 2025 to 10.1% at end-January 2026, then to 9.9% at end-February, 9.6% at end-March, and 9.2% at end-April 2026.
Central also remained the key driver of rental growth in March and April. In March, Central recorded a 3.8% year-to-date increase in rents, while overall office rents rose only 0.1% month-on-month. In April, overall office rents increased 1.2% month-on-month, with Central again leading the market through a 2.1% month-on-month rental increase.
This matters for tenants because Central’s recovery is increasingly concentrated in quality buildings and core occupier demand. Sam Gourlay, Head of Office Leasing Advisory at JLL in Hong Kong, noted that leasing demand continues to focus on core business districts, driven primarily by financial institutions.
For companies that require a Central address, proximity to clients, access to financial institutions, or a premium workplace experience, the window for securing high-quality space on favourable terms may be narrowing.
Tsim Sha Tsui remains resilient, while Kowloon East faces pressure
The 2026 data also shows diverging conditions across Kowloon submarkets. Tsim Sha Tsui has remained comparatively resilient, with vacancy at 6.7% at end-January, 7.0% at end-February, 6.8% at end-March, and 6.9% at end-April 2026.
Kowloon East, by contrast, continues to face leasing headwinds. Its Grade-A vacancy rate stood at 19.3% at end-January, 19.5% at end-February, 20.4% at end-March, and 20.7% at end-April 2026.
In March, Kowloon East’s vacancy rate rose by 0.9 percentage points month-on-month, largely due to whole-floor units returning to the market after lease expirations. Rents in Kowloon East also declined 0.7% month-on-month in March, while Central continued to record rental growth.
This does not mean Kowloon East should be dismissed. For cost-conscious occupiers, large-space users, back-office functions or companies seeking more efficient floorplates, the district may still provide strategic opportunities. But tenants should evaluate each building carefully, including landlord profile, building specifications, transport connectivity, amenities, expansion options and long-term repositioning plans.
Banking, finance and insurance are shaping demand
One of the defining features of the 2026 Grade-A office market is the role of financial and insurance occupiers. JLL reported that the banking sector remained a key driver of February leasing activity, with Standard Chartered Bank and Rabobank among the notable transactions.
In April, the insurance sector remained a key source of demand, with AXA leasing three high-zone floors totalling 97,500 sq ft at International Gateway Centre in West Kowloon.
Large corporate commitments are also shaping the future leasing landscape. In March, J.P. Morgan signed a ten-year anchor lease at Artist Square Towers in the West Kowloon Cultural District, committing to approximately 250,000 sq ft across six connected floors in a development expected to complete in 2027.
These transactions point to an important tenant trend: major occupiers are still making long-term office commitments when the location, building quality, scale, specification and timing align with business needs.
How JLL Hong Kong helps tenants navigate the Grade-A office market
In a market defined by divergence, tenants need more than a list of available units. They need advice that integrates market intelligence, lease negotiation, workplace planning, cost analysis and execution.
JLL’s Hong Kong research team delivers market intelligence across commercial real estate dynamics, supported by more than 550 global research professionals tracking economic and property trends in over 60 countries.
This is particularly important in 2026 because the gap between “market average” and “building-specific reality” is widening. A landlord in a tightening Central tower may approach negotiations differently from a landlord in a high-vacancy decentralised building. A tenant with strong covenant, clear timing and a well-defined space requirement may be better positioned to secure favourable terms than a tenant entering negotiations without market evidence.
Frequently asked questions
Is Hong Kong’s Grade-A office leasing market recovering in 2026?
Yes, but the recovery is uneven. The market recorded strong positive net absorption in late 2025 and early 2026, including 537,000 sq ft in December 2025, 589,700 sq ft in January 2026, and 143,700 sq ft in February 2026. However, March recorded negative net absorption of 119,200 sq ft, mainly due to whole-floor units returning to the market in Kowloon East.
Which Hong Kong office district is performing strongest in 2026?
Central is leading the Grade-A office recovery. Its vacancy rate declined from 10.1% at end-January to 9.2% at end-April 2026, while rents recorded strong growth in the first four months of the year.
Is Kowloon East still attractive for office tenants?
Kowloon East remains relevant for tenants seeking larger floorplates or cost-effective options, but the district continues to face pressure. Its vacancy rate rose to 20.7% at end-April 2026, compared with 9.2% in Central and 6.9% in Tsim Sha Tsui.
Are office rents rising in Hong Kong?
Overall office rents rose 1.1% month-on-month in February, 0.1% in March, and 1.2% in April 2026. Central was the primary driver of rental growth, including a 2.1% month-on-month increase in April.
What should tenants do before signing a lease?
Tenants should benchmark district and building-level market conditions, compare total occupancy costs, review lease terms carefully, evaluate fit-out and reinstatement obligations, and seek professional advice before committing.
Conclusion: mid-2026 is a tenant opportunity, but only with the right strategy
Hong Kong’s Grade-A office leasing market is no longer defined by broad-based weakness. It is increasingly shaped by polarisation: Central and selected core locations are tightening, while some fringe submarkets remain under pressure.
For tenants, this creates both risk and opportunity. Acting too slowly in a tightening core market may reduce choice and negotiating flexibility. But focusing only on headline rent in a softer submarket may lead to a space that does not support long-term business performance.
The best leasing decisions in mid-2026 will be evidence-led, building-specific and aligned with business strategy. JLL Hong Kong’s Office Leasing Advisory team helps occupiers interpret market signals, compare options and secure office solutions that support cost control, operational efficiency, employee experience and future growth.
Looking for Grade-A office space in Hong Kong?
Explore available office listings on JLL Hong Kong’s office leasing e-platform or speak with JLL Hong Kong’s Office Leasing Advisory team to assess your next move.
