The cost of renting office space in the most sought-after areas of the city has risen sharply in recent months as many of the world’s major banking groups recover from the financial crisis, and this dynamic is prompting several high-profile occupants to consider alternatives.
Businesses like Allianz Global Investors and PriceWaterhouseCoopers (PwC), which are both renting large areas of Hong Kong office space, are now weighing up whether buildings outside the CBD might offer more affordable and appropriate solutions, Bloomberg reports.
The pace of rental growth in Hong Kong office space has been dramatic in recent months, with CB Richard Ellis suggesting rents in the CBD increased by as much as a third year-on-year, earlier this year.
Such sharp rises are even thought to be putting the squeeze on major banking and insurance firms, as buildings in the busiest areas of the city have begun offering rents that are the second most expensive anywhere in the world.
A growing number of businesses “are going to be reviewing their cost base as a result of rising rents in Central,” Rhodri James, an office services executive with CB Richard Ellis in Hong Kong, told Bloomberg.
“Some of them will be moving all or part of their operations to more cost-efficient buildings outside the area,” he added.
Three of the four most expensive cities for office space rents are now in the Asia Pacific region, with Hong Kong, Tokyo and Mumbai outpriced only by the West End of London, according to CBRE’s latest data.
Editor’s notes: According to JLL’s Premium Office Rent Tracker, in 2022, the Central district in Hong Kong was the most expensive area in the world to rent office space at US$259 per square foot per year, followed by Midtown in Manhattan, the West End in London and then Finance Street in Beijing, reaching $220, $182 and $167 per square foot respectively.
Tokyo’s Marunouchi district was the 17th most expensive location to rent office space in 2022 at $103 per square foot, and Mumbai’s SBD BKC district was 21st on the list, commanding $97 per square foot per annum.
Research conducted in June 2026 found that Savills, in its Global Occupier Markets: Prime Office Costs – Q4 2025, identified Hong Kong as the second most expensive location in which to rent office space, with a net effective cost of $227.68 per square foot
London’s West End was the most expensive location, with a net effective cost of $336.65 per square foot per annum, and Midtown New York was third at $200.30 per square foot.
The City of London was the fourth most expensive location at $196.94 per square foot, and Tokyo was fifth with a net effective cost of $168.67.
Cushman and Wakefield reported that the sentiment in Hong Kong’s Grade A office market remained positive in Q1 2026 on the back of sustained demand from the banking and finance and insurance sectors.
The firm reported that office rental levels of Greater Central and Greater Tsimshatsui continued to pick up, increasing
5.5 per cent and 0.4 per cent quarter on quarter, respectively.
The overall rental level across all Hong Kong submarkets increased by 2.4 per cent quarter-on-quarter in Q1, representing two consecutive quarters of rental growth for the first time since Q1 2019.
The total office leasing take-up in Q1 was 866,000 square feet. Two notable pre-let deals of the quarter included JPMorgan Chase’s acquisition of 186,100 square feet at Artist Square Towers in Greater Tsimshatsui, and AXA Insurance’s commitment to a 73,600-square-foot take-up at One International Gateway Centre (IGC), Greater Tsimshatsui.
In terms of the supply side, around 1.4 million square feet of new Grade A office space was expected to be
completed in 2026, half that of the new supply seen in 2025. With no new completions in the first quarter of the year, Hong Kong’s availability rate remained broadly stable at 20.0 per cent.