Full Breakdown
Hong Kong's Headquarters Economy Fuels Commercial Real Estate Recovery
2/8/2026, 12:05:40 PM
Overview of the Headquarters Economy
Hong Kong's commercial real estate sector is experiencing a recovery driven by its "headquarters economy," where the city serves as a regional and global base for corporate headquarters. Analysts predict an improved investment environment for 2025, as the office market shows signs of stability following a challenging period.
Key Developments in the Office Market
According to CBRE, Hong Kong recorded a net absorption of 2.1 million square feet (195,000 square meters) of office space in 2025, marking the largest annual total since 2018. The Central district saw significant improvement, with 234,800 square feet of net absorption in the fourth quarter, the highest since the second quarter of 2015. The full-year figure for Central reached 496,000 square feet, the strongest annual total since 2007. Despite this positive trend, overall office rents fell by 2.9% year-on-year, representing the smallest annual decline since 2019.
Growth in Corporate Registrations
The resurgence in demand for office space aligns with a record number of locally registered companies in Hong Kong, totaling 1.56 million by the end of 2025. This figure reflects an increase of 96,609 from the previous year, with 195,343 newly registered or redomiciled firms and 15,586 new non-Hong Kong companies establishing operations in the city. Eric Tsang, acting head of valuation and advisory services at Colliers, noted that the headquarters economy bolsters demand for premium office spaces, particularly in well-located, high-quality buildings that support regional management and professional services.
Official Statements & Responses
Industry experts emphasize that the headquarters economy is crucial for stabilizing the leasing market. Tsang stated, “This has helped stabilise leasing across the office market and created renewed interest in prime and quality office assets, even as the broader office sector continues to adjust.” This sentiment reflects a broader optimism among analysts regarding the future of Hong Kong's commercial real estate sector.
Criticism & Opposition
Despite the positive outlook, some critics express concerns about the sustainability of this recovery. They argue that the reliance on a headquarters economy may not be sufficient to address the underlying challenges faced by the broader office market, including the potential for economic fluctuations and changing work patterns post-pandemic.
What's Next
As Hong Kong continues to attract new businesses and strengthen its position as a headquarters hub, stakeholders will be closely monitoring the commercial real estate market for further developments. The ongoing adjustments in leasing and rental rates will be critical indicators of the sector's long-term health and resilience.
Verbatim Quotes
- “The [ headquarters economy ] reinforces demand for premium office space, especially well-located, high-quality buildings that support regional management, capital markets and professional services functions,” — Eric Tsang, Acting Head of Valuation and Advisory Services at Colliers.
