Hong Kong office tenants pay the second-highest costs in the world for prime space, behind only tenants in London’s West End, according to research by property consultancy Savills.
Office space in Hong Kong cost an estimated US$228 per square foot per year including rent and fit-out costs, according to the study, which tracked prime offices in 40 markets around the world in the first quarter. The cost of office space in Hong Kong declined 1.1 per cent compared with the fourth quarter, Savills said on Wednesday.
For a prime office tenant in London’s West End, occupancy costs averaged US$299 per square foot per year, while tenants in third-ranked Midtown in New York City paid US$207, the study said.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
Hong Kong was the most expensive city in the world for office costs in the second quarter of 2022 in the Savills research, at US$250.56 per square foot per year. Hong Kong office rents have declined by 40 per cent since 2019, according to CBRE, as demand failed to keep up with growing supply. Last year, the segment’s rents declined by 6.3 per cent.
“Globally, rental growth for prime office space accelerated in the first quarter of 2025, increasing on average by 0.6 per cent,” Savills said. “Fit-out costs also rose by 0.7 per cent during the same period, following a 0.2 per cent increase in the fourth quarter of 2024, reflecting occupiers’ ongoing demand for high-quality office environments.”
The Savills study tracks offices commanding the highest 5 per cent to 10 per cent of rents in each specific market. The annual all-in occupancy cost represents real-time transaction terms for 20,000 sq ft of usable space based on a basket of the top five most expensive properties in each market.
Hong Kong is facing a glut of commercial space that may take between seven and 15 years to digest, according to experts. The city has 15 million sq ft of excess office space, more than all the current space in the main business district.
Grade A vacancy rates in Hong Kong increased to 13.7 per cent in March from 13.3 per cent in February, according to JLL.
In 2025 and 2026, about 6 million sq ft of new office space will come on the market, including 2.6 million sq ft at International Gateway Centre in West Kowloon and 1.06 million sq ft at Lee Garden Eight in Causeway Bay, according to data compiled by Midland IC&I.
“Overall net effective costs in Asia-Pacific held steady, with a 0.1 per cent rise in the first quarter, as rates across China declined in the face of a muted economic outlook,” the study said. “However, other Asia-Pacific markets posted growth.”
Premium office tenants in Tokyo faced the fifth-highest costs globally at US$156.11, while Singapore was in ninth at US$148.88, the Savills study said. Shanghai and Beijing ranked 14th and 17th, respectively.
More from South China Morning Post:
- Hong Kong’s office segment to see faster turnaround than retail sector: Morgan Stanley
- Hong Kong’s Tsim Sha Tsui is world’s top high street, beating Madison Avenue, Bond Street
- Hong Kong’s largest flex-office provider seeks deals with vacant-office landlords
For the latest news from the South China Morning Post download our mobile app. Copyright 2025.
