Hong Kong office vacancy rates could surpass 20% by 2027

That is if annual take-up only reaches 0.5m sq ft.

In Hong Kong, there is projected to be an additional office supply of 8.0 million square feet between 2024 and 2027. According to Savills, this will contribute to the accumulation of vacant spaces, consequently exerting downward pressure on rental rates. 

Here’s more from Savills:

While the speed of demand recovery in the upcoming years remains uncertain, in an optimistic scenario where Mainland corporates, financial institutions, and emerging sectors like family offices, fintech, I&T, and web 3.0 gradually occupy office spaces, there is a potential for a take-up pattern similar to the period between 2011 and 2019, with an average annual take-up of 1.3 million sq ft net. However, even in this scenario, office vacancy rates are projected to reach 17% by the end of 2027. 

Conversely, if demand follows a more volatile trajectory resembling the average annual take-up of 0.5 million sq ft net witnessed from 2018 to 2022, office vacancy rates are expected to surpass the 20% threshold by 2027.