Colliers: The registration volume of commercial properties in Hong Kong reached a five-year high in the first eight months, indicating that the market is in a recovery phase.

According to the data from Midland Holdings' Commercial Property Research Department and the Land Registry, the total number of registered commercial property transactions in Hong Kong reached 3,494 in the first eight months of 2026, representing a year-on-year increase of approximately 14.5%, marking a nearly five-year high for the same period. However, the registered transaction amount was about HKD 36.2 billion, which still saw a year-on-year decline of 3.5%. Ma Tai-yang, CEO of Midland Holdings and Midland Commercial Properties, pointed out that the overall transaction volume of commercial properties has rebounded year-on-year, reflecting that the market has emerged from a low point, with buyers showing increased acceptance of commercial properties after price adjustments. Nevertheless, the registered transaction amount has not fully mirrored the rise in transaction volume, indicating price pressures, with the market primarily driven by properties that are reasonably priced, have rental support, and possess long-term appreciation potential. It is expected that the monthly registration volume in the commercial property market might maintain around 400 transactions in the future, and the rental pressure is likely to gradually ease and stabilize. In August 2026 alone, the total number of registered commercial property transactions in Hong Kong recorded 410 transactions, a month-on-month decrease of 16.2%. The registered transaction amount was approximately HKD 4.57 billion, down 14.0% month-on-month, with the amount's decline slightly less than that of the transaction volume. Ma Tai-yang noted that the overall registered volume and amount for commercial properties fell in August, primarily reflecting a normal consolidation in the market after a surge in large transactions in July. Although the number of large transactions decreased compared to July, the market still recorded several representative deals. A local family purchased the entire Henry Group Center in Causeway Bay along with a nearby commercial space and parking for HKD 892 million; another buyer acquired the entire Kowloon Funeral Home and the adjacent land factory for around HKD 473 million, indicating that entire buildings with redevelopment, operational, or long-term asset allocation value are still attracting attention from strong buyers. It is worth noting that although the number of registered commercial property transactions in August fell month-on-month, the Hong Kong commercial property market has maintained a monthly transaction level of 400 or more for six consecutive months, representing the best performance since 2021. Looking back at 2021, the commercial property market had a monthly registration volume exceeding 400 for the entire year, with more than 500 transactions recorded for seven consecutive months. Ma Tai-yang believes that the stability in transaction volume reflects an improving trading foundation in the market. With price adjustments, owners willing to increase negotiation margins, and capital searching for attractive return properties, the commercial property market is expected to gradually establish a more solid recovery momentum. Currently, there are no clear signs of a downturn in the market, only a slowdown in transaction rhythm. Office buildings continue to be an important driving force for the broader commercial property market. In the first eight months, the registration volume for office transactions totaled 896, representing a year-on-year increase of 20.9%, the highest among the three major segments; the registered amount was approximately HKD 18.01 billion, up 10.5% year-on-year. Office properties also continued to be the only category among the three major segments to record simultaneous increases in both volume and amount, reflecting a continued warming interest in office properties from capital. For August, the registration volume for office transactions recorded 142 transactions, a month-on-month drop of 6%; the registered amount was approximately HKD 2.45 billion, a decrease of 7.8% month-on-month. Ma Tai-yang stated that the transaction volume for office buildings remains relatively active, and the first eight months have shown a simultaneous increase in amounts, indicating a gradual recovery in the markets acceptance of office assets. Capital continues to be concentrated in quality office buildings. For instance, a high-floor unit in the East Tsim Sha Tsui Kowloon Plaza was sold for about HKD 166 million, with a unit price of around HKD 10,000, marking a near two-year high for this type of office property; the Far East Finance Centre in Admiralty also saw a unit change hands after about six months of holding, resulting in a book profit of approximately HKD 17.28 million, reflecting an appreciation of close to 20%. Ma Tai-yang believes that individual office transactions and resale cases showing strong performance reflect that prime quality office properties in core areas are beginning to attract investors and users after price corrections. In terms of rental performance, the vacancy rate for Grade A office buildings dropped further to 8.6% in August, the lowest since December 2020; among these, the vacancy rate for Grade A office buildings in East Kowloon significantly fell by 0.9 percentage points to 16.3%, also a new low since October 2022. On the other hand, Grade A office rents in August rose by 0.9% month-on-month, showing a cumulative increase of about 2.5% this year, indicating that office rents are gradually stabilizing. Ma Tai-yang pointed out that the ongoing decline in vacancy rates is an important positive signal for the office market, especially in East Kowloon, which has experienced comparatively high supply and vacancy pressure and has now seen noticeable improvement, indicating that the demand for leasing by enterprises is gradually resuming. With an active atmosphere in the financial market, increasing demand for expansion and relocation by businesses, and the gradual absorption of quality Grade A office supply in core business districts, downward pressure on rents is expected to ease further, and the investment value of quality office buildings is likely to gradually emerge. In the retail market, August saw the registration volume for transactions recorded at 98, a slight month-on-month decline of 1%, reflecting a generally stable trading environment for retail properties; however, the registered amount was around HKD 800 million, a month-on-month drop of 36.3%, mainly impacted by the decrease in large transactions. For the first eight months, the registration volume for retail property transactions totaled 816, reflecting a year-on-year increase of 13.5%; the registered amount was approximately HKD 8.38 billion, a year-on-year decline of 22.5%. Ma Tai-yang believes that the year-on-year increase in retail transaction volume shows that the market still has an interest in properties located in livelihood consumption areas, mature transportation sectors, and street shops with relatively stable rental foundations. However, the year-on-year decline in transaction amounts reflects that buyers are currently targeting properties that are reasonably priced, offering attractive rental returns, and possessing potential for long-term restructuring. As local retail and dining consumption gradually stabilizes, along with the effects of traveler spending and festive peak seasons, this is expected to support rentals in some core retail areas and livelihood locations. In the industrial building market, the registration volume for transactions recorded 170 in August, a month-on-month drop of 28.9%, the largest decrease among the three major segments; the registered amount was approximately HKD 1.31 billion, with only a 5.8% month-on-month decline. The significant drop in registration volume was primarily due to the relatively active transactions in July and the high base caused by the concentration of certain transactions for registration; however, in August, there were still transactions exceeding HKD 400 million for the entire Kowloon Funeral Home and the adjacent land factory, supporting the overall registered amount. For the first eight months, the registration volume for industrial building transactions totaled 1,782, indicating an 11.9% year-on-year increase, continuing to be the most active category among the three major segments; the registered amount was approximately HKD 9.81 billion, a year-on-year decline of 5.8%. Ma Tai-yang indicated that the transaction volume in the industrial building market remains robust, reflecting a continued demand from owner-occupiers, small and medium-sized enterprises, and investors for practical industrial and warehouse properties. With the gradual improvement in leasing demand for industrial buildings, coupled with the willingness of some owners to provide more attractive negotiation margins, this is expected to support sustained activity in the industrial building market. Looking ahead, Ma Tai-yang believes that the commercial property market remains in a recovery phase led by quantity first, with prices gradually bottoming out. New projects such as iCITY and 83 Yung Kong Street still have some units waiting to be absorbed by the market. If developers continue to sell with pricing closer to the market and flexible payment arrangements, it is expected to continually attract users and investors, providing support for future commercial property registration volumes. The recent recovery in the commercial property market has several foundations, including months of steady registration volumes, gradually improving vacancy rates for Grade A and industrial buildings, recovering office rents, and increased market acceptance of quality assets in core areas. The future commercial property market is expected to maintain a monthly registration volume around 400, with rental pressures likely easing and stabilizing. Among them, office buildings in prime locations with quality management, convenient transportation, robust rental foundations, and attractive pricing are expected to continue being the main targets of substantial capital and long-term investors.