Hong Kong Office Rents Jump 7.3% as CK Asset Tower Fills Up

CK Asset Holdings (CHKGF), the Hong Kong property developer controlled by Li Ka-shing, is seeing a strong recovery in leasing demand at its 41-storey Cheung Kong Center II office tower. Occupancy has more than doubled to about 60% since the beginning of 2026, compared with roughly 10% shortly after the building was completed in 2024. People familiar with the matter said CK Asset expects the tower to be at least 75% occupied by the end of the year. Nearly one-third of the building's 560,000 square feet of available space has been leased since January, with new tenants including PetroChina, a mainland Chinese company, and First Abu Dhabi Bank, a financial institution based in Abu Dhabi. The improvement appears to reflect stronger demand from financial companies seeking larger or higher-quality offices as Hong Kong's economy and capital markets recover.

The leasing rebound at Cheung Kong Center II may also point to a broader improvement in Hong Kong's premium office market after several years of weak demand and rising vacancies. Jones Lang LaSalle, a property consultancy, reported that Grade A office rents in Central increased 7.3% during the first half of 2026, representing the strongest six-month gain in 15 years. Vacancy in the district fell to 8.8% from 10.9% at the end of 2025. Demand has partly spilled over from One and Two International Finance Centre, office towers jointly owned by Sun Hung Kai Properties, a Hong Kong property developer, and Henderson Land Development, a local real estate group, where vacancies are close to zero. Finance and insurance companies accounted for about half of new leases during the first six months, while Ares Management, a U.S. alternative investment manager, IMC Trading, an Amsterdam-headquartered trading firm, and Endowus, a wealth management company, expanded their Hong Kong offices.

Hong Kong's economy grew 5.9% in the first quarter, its strongest expansion since 2021, while increased equity capital market activity has supported demand from companies willing to commit to long-term leases. Jones Lang LaSalle expects overall prime office rents in Hong Kong to rise by as much as 5% in 2026, which could bring an end to the decline that began after the market peaked in 2019. Office properties also represented the largest share of first-half investment transactions by both value and volume, suggesting that well-capitalized investors may be becoming more interested in commercial real estate. Dah Sing Financial Holdings, a Hong Kong financial services company, agreed through its banking unit to acquire office floors and retail space for HK$839 million, while Wee Hur Holdings, a Singapore-based company, paid HK$749 million through a subsidiary for a distressed asset. Investors may still view the recovery as concentrated in the core business districts, as vacancy remains above 20% in Kowloon East and a wider office-market upswing may not emerge until late 2027 or 2028.