Hongkong Land expects office rental decline to end next year
The company expects to see rental growth in its Landmark mall in Hong Kong, where the firm is carrying out upgrades
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[HONG KONG] Hongkong Land Holdings expects rents in its office towers to stabilise in 2027 after six years of declines as the financial hub’s commercial real estate market begins to recover.
“Expiring rents are matched by a similar level upon renewal, which would mean that our office rents in Hong Kong would be flat and stabilise” next year, chief financial officer Craig Beattie said in an interview. The company expects to see rental growth in 2028, he added.
Average office rents for the firm in the first half of this year were HK$91 (US$11.60) per square foot, a 4 per cent drop from the same period last year. The company has seen rents decline since 2020 amid the city’s office downturn.
Potential rental growth in Hongkong Land, the Central district’s largest commercial landlord, is another positive sign for the city’s office sector. Grade A rents in Central rose 7.3 per cent in the first half, the biggest six-month gain in 15 years. Vacancy rates fell to 8.8 per cent from 10.9 per cent at the end of 2025, according to Jones Lang LaSalle.
Hongkong Land reported on Tuesday (Jul 28) that underlying profit for the first six months of the year rose 11 per cent from a year earlier. It raised its dividend by 33 per cent to eight US cents a share.
Shares of Singapore-listed Hongkong Land closed on Wednesday at US$8.29, up US$0.40 or 5.1 per cent. The stock has gained about 16 per cent this year.
The company expects to see rental growth in its Landmark mall in Hong Kong, where the firm is carrying out upgrades. Average retail rents for the mall rose 9 per cent in the period.
Rents per square foot for the retail portfolio hit a record high in the first half, according to Beattie, with rates expected to increase for the next five to 10 years.
In its large-scale, mixed-use commercial project Westbund Central in Shanghai, the company recorded an 85 per cent commitment on the retail side and 95 per cent on the serviced apartments for the portion of the project that has opened, Beattie said in a separate interview with Bloomberg Television. Three out of four office towers in the project are fully occupied, he added.
Hongkong Land is looking at a number of investment opportunities for its recently established US$6 billion Singapore property fund, he shared. The fund is part of the company’s efforts to expand into real estate fund management rather than as a traditional developer or landlord. It has also been offloading non-core assets to raise cash for share buybacks in the past year.
Hongkong Land is owned by Jardine Matheson Holdings, a Hong Kong-based conglomerate that traces its roots back to an opium trading house founded in 1832. BLOOMBERG
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