Kao Li: The forecast for the increase in rent for the Central/Admiralty office buildings this year has been revised to a maximum of 8%, but rents in Kowloon East are expected to drop by more than 5%.

The Research Department and Retail Consultancy Manager of Colliers Hong Kong, Li Wanyin, stated that despite the complex and ever-changing macroeconomic environment, the commercial real estate market in Hong Kong continues to show good resilience. Corporate tenants are increasingly demanding in terms of location and asset quality, preferring quality properties in core business districts such as Central and Admiralty. Meanwhile, investors continue to focus on investment opportunities with stable income and long-term growth potential, including office assets, as well as education and accommodation related properties. Colliers Hong Kong's Corporate Client Services Manager, Yan Huiping, stated that demand in core business districts will continue to support the overall performance of the office market. Although there will be approximately 1.2 million square feet of new supply coming online in the second half of the year, owners and tenants have already factored in these supply factors into current rental levels. The company has raised its forecast for rental growth in Central/Admiralty to 5% to 8%; however, rents in non-core business districts are expected to remain under pressure, with rents in Kowloon East expected to fall by more than 5%. Regarding retail shops, Li Wanyin mentioned that as some factors driving consumption growth gradually normalize in the second half of the year, the pace of retail sales growth may slow down. However, with increasing visitor arrivals to Hong Kong and limited supply of shops in prime locations, leasing demand and rental performance will continue to be supported. The company predicts a rental increase of about 3% for prime street shops in 2026. As for industrial properties, Yan Huiping expects a decline of about 5% for the year, but the market's long-term fundamentals remain strong. With continued growth in AI-related trade activities and Hong Kong actively expanding its gold storage capacity, there will be new demand opportunities for professional logistics facilities, high-security warehousing space, and related support services. In the second quarter, the total investment transaction volume was approximately HK$14 billion, a slight decrease of only 5.5% quarter-on-quarter. Overseas funds remained active, with overseas capital flowing into Hong Kong reaching a three-year high in the second quarter, with over 60% coming from investors from Singapore. Colliers Hong Kong's Capital Markets and Investment Services Director, Zhai Cong, pointed out that with more distressed assets and price adjusted assets entering the market, investors will have more attractive entry opportunities, and education and accommodation assets are expected to become the main driver of the investment market in the second half of 2026, maintaining the forecast of a total investment transaction volume of approximately HK$42 billion for the year.