Core Insights - The report by CBRE highlights the recovery and analysis of Hong Kong's office market from 2022 to 2025, predicting a gradual increase in office demand until 2028 due to economic improvement and various driving factors [1][4]. Group 1: Market Trends (2022-2025) - Total leasing area increased by 1.1 million square feet, driven by some industries expanding office space despite cost-saving measures [2][3]. - The vacancy rate has risen to over 17%, nearly double the pre-pandemic level, due to significant supply increases [2][3]. - New Grade A office supply reached 7 million square feet, 2.3 times the previous period, marking the highest level of new supply in 15 years [2][3]. - 55% of the new supply remains unleased, contributing to 3.9 million square feet of vacant space [2][3]. - Rental rates have decreased by 17% during this period, a slower decline compared to the 27% drop observed in the previous study period [2][3]. Group 2: Emerging Trends - New trends in the Grade A office market include a recovery in total leasing area, with significant growth from public and educational sectors, as well as non-traditional banking and financial companies [3]. - There is a shift in corporate office footprints, with local companies expanding while multinational firms are downsizing [3]. - The trend of decentralization from Central has slowed, with a continuous decline in space involved over two research periods [3]. - Increased demand for green offices, with owners actively renovating to meet environmental standards [3]. - The shared office space sector is contracting, indicating a shift in market dynamics [3]. Group 3: Future Outlook (2026-2028) - CBRE expresses confidence in Hong Kong's economic prospects, with improvements in global rankings enhancing market confidence and attracting global enterprises [4][5]. - Office demand is expected to gradually recover, driven by the resurgence of traditional services, increased presence of mainland Chinese companies, and emerging new economy sectors [4][5]. - The market will see a rethinking of workplace strategies to adapt to the new normal, with varying competitive dynamics across different regions [4][5]. - Tsim Sha Tsui West is anticipated to emerge as a strategic alternative hub for financial companies [4][5]. - Owners are adopting flexible leasing strategies, including green leases and shared facilities, to meet evolving tenant demands [5].