Already the most expensive city in the world to occupy offices, Hong Kong’s commercial property prices are rising, and a lack of new sites available for development means supply is significantly restrained.
Solutions are being sought, with the redevelopment of an abandoned airport among the latest ideas, Bloomberg reports.
Kai Tak Airport has been idle since 1998, and developers are eyeing the site as one that could play a major part in keeping Hong Kong office space affordable, particularly for the banking groups that form such an important part of the city’s wider economy.
The fear among property service professionals in Hong Kong is that office rents will reach levels that force businesses to reconsider their options in Asia and possibly shift all or some of their operations to sites in the rival financial services hubs of Singapore or Shanghai.
A radical revamp of the disused airport could, it is hoped, do for Hong Kong what Canary Wharf did for London’s office space market in recent decades by delivering millions of square feet of new supply outside the city centre.
Canary Wharf is now well established as London’s second financial services centre after The City, with several of the world’s biggest banks having moved their headquarters to the purpose-built site.
Simon Smith, head of Asia research at Savills, told Bloomberg that Hong Kong will be obliged to decentralise its office space supply in much the same way as London and other developed markets around the world have when shortages became a serious problem.
Canary Wharf boasts some of the largest buildings in Europe, and its high-profile occupants include HSBC, Bank of America Merrill Lynch, Barclays and Citigroup.
Editor’s notes: In Q1 of 2023, Hong Kong remained home to the most expensive district in which to rent office space in the world – Central.
At that time, the vacancy rate within the office space market stood at 14.4 per cent and rental values were expected to increase by 5 per cent over the year.
This was due to the relief from internal conflict within the city, the lifting of pandemic lockdowns, and the opening of the border with the Chinese mainland, combined with increased demand from occupiers for the best-in-class office space.
Phases of the redevelopment of the circa 800-acre Kai Tak Airport site in Kowloon had already been completed as of July 2023.
Known as the Kai Tak Development (KTD), the scheme was expected, on completion, to deliver 30,000 housing units to accommodate a population of circa 86,000 and to provide government, institutional and community (GIC) facilities, commercial areas and extensive open spaces.
In August 2026, it was reported that the Government received two tenders for the Smart & Green Mass Transit System (SGMTS) in Kai Tak after the open tender closed.
JLL reported that in Q2 2026, total net absorption reached 492,000 square feet, as leasing demand from the financial sector remained robust and pushed the Central district vacancy rate down to 8.8 per cent.
The overall Grade A vacancy rate stood at 13.1 per cent.
A lack of new supply, combined with positive net absorption, drove the citywide vacancy rate down.
The firm predicted that demand for Grade A space in Central would stay firm through 2026, supported by a strong IPO pipeline and mainland wealth inflows. Central Grade A rents were therefore forecast to rise 10-15 per cent over the year.
It was separately reported that the Central district led leasing activity with 100 deals in H1 2026, its highest first-half number since 2019.