Hong Kong real estate sees rising data centre demand and falling office vacancies

Hong Kong is experiencing shifting trends in its commercial real estate market, characterized by rising demand for data centres and a significant decline in office vacancies.

According to CBRE, the data centre market is facing tight supply and increasing demand for AI-ready capacity. This demand is being driven by hyperscalers, e-commerce companies, and financial institutions seeking operational resilience. While newer facilities maintain lower vacancy rates, older stock faces challenges due to rising power and operating costs. The Sandy Ridge Data Facility Cluster is expected to provide significant capacity starting in 2029. Additionally, Goodman Group has established a US$2.7 billion data centre partnership in the region.

In the office sector, the Grade A market recorded its largest quarterly vacancy decline since 2015. Citywide vacancy fell to 15.5% in the third quarter of 2026. The Central district saw strong activity driven by expansionary demand from banking and financial firms, with Central rents rising 15.8% year-to-date. While Central and Hong Kong Island saw net absorption, Kowloon East experienced negative net absorption due to tenant downsizing.