_Hong Kong Monthly Report - February 2026
Knight Frank's latest Hong Kong Monthly Report highlights the varied performance of the property market.
Grade-A Office Market
Hong Kong
Leasing trends from 2025 are continuing into January 2026, with premium Grade-A offices in Central seeing rising occupancy and limited available spaces on the market. This has driven rental increases in specific premium buildings. Driven mainly by strong demand from the finance sector and a scarcity of vacant space in the prime Central market, traditional Grade-A buildings and offices in secondary locations may benefit from this significant demand.
Kowloon
Transaction activity fell short of expectations compared to December 2025. Nevertheless, market pessimism is easing, as shown by larger average lease sizes driven by relocations of sizeable companies. Tenants over 10,000 sq ft are shifting to more “active” decisions; unlike last year’s short-term renewals, January saw proactive moves amid uncertainty, boosting downsizing relocations. These relocations remain concentrated in Kowloon East, highlighting the region’s ongoing fragility.
Residential
The primary mass market continued to lead activity, with developers pushing new projects, recording 1,542 units in January, up 101% YoY.
On the leasing front, activity also remained robust. Stocks within the HK$20,000–HK$130,000 monthly rental bracket have become increasingly constrained, reflecting strong demand across all tenant types. Competition for quality units intensified throughout the month, further pushing up the rentals.
Retail
In 2025, total retail sales amounted to HK$380.46 billion, a marginal 1% YoY increase, though still 22% below the 2018 level. In December 2025 alone, retail sales rose 6.6% YoY, supported by strong festive demand.
In January 2026, a gold retailer renewed its Russell Street, Causeway Bay flagship store at a rent 6% below 2023 levels and nearly 17% under the landlord's asking price. The discounted renewal of this prime Russell Street shop highlights the continued softness in Hong Kong’s high‑street leasing market, with retailers remaining cautious and landlords adjusting rents to maintain occupancy.