ECONOMY

Hong Kong’s IPO Boom Breathes Life Into Office Sector, but Rents Still Under Pressure

Published: Jul. 8, 2025 4:16 a.m. GMT+8

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Office buildings in Hong Kong’s Central District on April 1, 2025. Photo: Bloomberg

Hong Kong’s booming IPO market is fueling a partial rebound in the city’s beleaguered office sector, with Central’s premium business district leading the recovery. However, persistently high vacancy rates citywide mean rents are expected to keep falling throughout 2025, according to a report released Monday by CBRE, the real estate services company.

The report shows Hong Kong’s office net absorption — the net change in leased space accounting for new leases, expansions and vacancies — turned positive in the second quarter of 2025. The market recorded 147,700 square feet (13,700 square meters) of net take-up, breaking a two-quarter streak of negative figures and signaling an improvement in leasing activity.

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Hong Kong’s IPO market rebounded strongly in 2025, with 44 IPOs raising HK$107.1 billion in H1 and projected to exceed HK$250 billion for the year.
Central District leads office sector recovery, but overall city office vacancy rose to 17.4% in June 2025; non-core areas like Kowloon East remain weak.
Despite improved leasing activity, office rents are expected to decline 7–9% in 2025 due to oversupply and high vacancies.

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Who’s Who

CBRE: CBRE, a real estate services company, published a report indicating Hong Kong's office sector saw positive net absorption in Q2 2025. Despite this, they predict citywide rents will continue falling throughout 2025 due to high vacancy rates. Their report highlights regional divergence, with Central recovering while other areas face negative absorption.

Henderson Land Development Co. Ltd.: Henderson Land Development Co. Ltd. (恒基兆业地产有限公司) is a property giant in Hong Kong. They announced on June 13 that Jane Street, a quant trading firm, leased six floors totaling over 223,000 square feet at their New Central Harbourfront Site 3 project. This marks the largest single office lease in Central's core district in decades.

Jane Street: Jane Street, a quantitative trading firm, made the largest single office lease in Central's core district in decades. They leased six floors, totaling over 223,000 square feet, at the New Central Harbourfront Site 3 project in Hong Kong. This significant deal contributed to a rebound in Hong Kong's office net absorption in Q2 2025.

Cushman & Wakefield: Cushman & Wakefield is a real estate services company. Their report highlighted that relocations and expansions by banking, finance, and insurance firms are boosting demand for Grade A office space in Hong Kong. John Siu, their Hong Kong managing director, noted that rising IPOs by mainland Chinese firms are also driving fresh demand.

Hong Kong Stock Exchange: The Hong Kong Stock Exchange has experienced a significant rebound in IPO activity in 2025. In the first half of the year, 44 companies debuted, a 47% year-on-year increase, raising HK$107.1 billion ($13.7 billion). This sevenfold jump compared to last year allowed the exchange to reclaim the global top spot for IPO fundraising.

KPMG: KPMG is one of the major accounting firms that has raised its full-year IPO forecasts for Hong Kong. It predicts that total IPO proceeds could exceed HK$250 billion if current market conditions continue. This optimistic forecast is driven by Hong Kong's rebound in IPO activity.

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What Happened When

First half of 2025：: 44 companies debuted on the Hong Kong Stock Exchange, up 47% year-on-year, raising a combined HK$107.1 billion ($13.7 billion), a sevenfold jump compared with first half 2024.

June 13, 2025：: Henderson Land Development Co. Ltd. announced that Jane Street leased six floors totaling more than 223,000 square feet at the New Central Harbourfront Site 3 project—the largest single office lease in Central’s core district in decades.

End of June 2025：: Hong Kong’s overall office vacancy rate rose to 17.4%, up from 16.9% at the end of December 2024.

Before July 3, 2025：: 1.2 million square feet of new office leases were signed in Hong Kong in the second quarter of 2025, the highest level since Q3 2019.

By July 3, 2025：: Cushman & Wakefield released a report noting renewed demand for Grade A office space from relocations and expansions by banking, finance, and insurance firms.

As of July 7, 2025：: CBRE released a report stating that net office absorption in Hong Kong turned positive in Q2 2025, recording 147,700 square feet of net take-up, breaking a two-quarter negative streak.

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