_Hong Kong Monthly Report - June 2026

Knight Frank's latest Hong Kong Monthly Report highlights the varied performance of the property market.

Grade-A Office Market

Hong Kong

Leasing momentum on Hong Kong Island strengthened in the first five months of 2026, with rents up 4.8% year-to-date (YTD). Central led the market, with Traditional Central rents rising 10.6% and Premium Central up 9.0% YTD. Sheung Wan, Admiralty and Wan Chai North saw modest rental growth of 1–5% YTD.  

Occupier demand is also shifting, with MNCs and financial institutions securing additional prime space early to accommodate future expansion amid limited high-spec supply, prompting earlier lease renewals and longer-term commitments.

Kowloon

Rental declines in Kowloon moderated to -2.06% in 1H 2026 from -3.6% in 2H 2025, with Kowloon Central and West Kowloon leading activity in terms of tenant enquiries and relocation. Leasing sentiment also improved in non-core districts, indicating a gradual broadening of demand.

The market is expected to approach a soft-landing in the second half of 2026, supported by expansion from insurance and financial occupiers and improving business conditions. Aside from Artist Square Tower in 2027, limited new supply will aid existing buildings’ absorption and support market stabilisation.

Residential

In May, the residential market extended its upward momentum, led by strong activity in the luxury segment, with 89 transactions above HK$50 million, rose 27.1% MoM. Total transaction volume reached 33,160 units in the first five months, primary sales accounted for 10,556 units (+56.3% YTD), significantly outpacing secondary sales at 22,604 units (+14.6% YTD), highlighting developers’ strong sales performance and sustained buyer preference for the primary market.

Leasing activity remained robust across both luxury and mass segments. Knight Frank’s Luxury Residential Rental Index continued its upward trend in May, rising 8.2% Year-on-year (YoY) and the Rating and Valuation Department (RVD) rental index up 5.1% YoY, indicating broad-based rental growth and a positive near-term outlook.

Retail

In April, retail sales rose 8.6% YoY, marking a 12th consecutive month of growth, with total sales up 11.3% YoY in the first four months of 2026. Luxury retail outperformed, supermarkets recorded modest growth, while local consumption remained mixed, with department stores declining.

Online retail sales accelerated by 30.2% YoY in January to April, accounting for 9.7% of total sales, and are forecast to reach HK$37 billion for the full year amid intensifying competition from Chinese mainland e-commerce platforms.

The retail market is becoming increasingly polarised across asset classes. Prime shopping malls benefiting from tourism recovery and stronger RMB supporting luxury spending by Chinese mainland visitors and ongoing tourism recovery, while mid-tier and neighbourhood malls continue to face pressure from rising e-commerce penetration and outbound consumption.