Hong Kong's office rents may decline up to 10 percent in 2025 due to oversupply and high vacancy rates, according to HSBC Global Research.

A HSBC Global Research report says office rents may decline by 7 to 10 percent this year, following the 39 percent decline since its peak in 2019.

It has lowered the target price for rent collection shares by an average of 5.9 percent and the recent improvement in leasing demand is not enough to offset the new supply, which is expected to decline starting from the second half of 2026.

A property agency expects the prices of Grade A offices to remain stable this year after a slump last year, with transactions of offices rising 20 percent year-on-year.

The agency said in 2024, sale prices of targeted Grade A offices dropped by over 23 percent year-on-year, noting the drop was mainly due to commercial buildings in traditional core districts significantly lowering asking prices to attract buyers.

The upcoming rate cuts and government's favorable policies on attracting investment and talent will boost office transactions to rise around 20 percent year-on-year, it added.

Meanwhile, Sun Hung Kai Properties (0016) expects foot traffic at its apm shopping mall in Kwun Tong to record a double-digit increase year-on-year alongside 10 percent growth in business during the Chinese New Year. Its promotional expenses for the Lunar New Year exceed HK$9 million, 10 percent higher than the previous year. The promotion period runs from January 17 to February 16.