HONG KONG: Hongkong Land Holdings Ltd expects rents in its office towers to stabilise in 2027 after six years of declines as the financial hub’s commercial real estate market begins to recover.
“Expiring rents are matched by a similar level upon renewal, which would mean that our office rents in Hong Kong would be flat and stabilise” next year, chief financial officer Craig Beattie said.
The company expects to see rental growth in 2028, he added.
Average office rents for the firm in the first half of this year were HK$91 per sq ft, a 4% drop from the same period last year.
The company has seen rents decline since 2020 amid the city’s office downturn.
Potential rental growth in Hongkong Land, the central district’s largest commercial landlord, is another positive sign for the city’s office sector.
Grade A rents in the central district rose 7.3% in the first half, the biggest six-month gain in 15 years. Vacancy rates fell to 8.8% from 10.9% at end-2025, according to Jones Lang LaSalle Inc.
Hongkong Land reported that underlying profit for the first six months of the year rose 11% from a year earlier. It raised its dividend by 33% to eight cents a share.
Shares of Singapore-listed Hongkong Land rose as much as 4.3% yesterday morning, the most in more than two months. The stock gained 16% this year.
The company expects to see rental growth in its Landmark mall in Hong Kong, where the firm is carrying out upgrades. Average retail rents for the mall rose 9% in the period.
Rents per square foot for the retail portfolio hit a record high in the first half, according to Beattie, with rates expected to increase for the next five to 10 years.
In its large-scale, mixed-use commercial project Westbund Central in Shanghai, the company recorded an 85% commitment on the retail side and 95% on the serviced apartments for the portion of the project that has opened. — Bloomberg
