A Measured Recovery: Why Hong Kong’s Commercial Property is Set for a 10% Rise in 2026

 
For years, the headlines surrounding Hong Kong’s commercial real estate have been defined by words like "battered," "correction," and "volatility." However, as we move into 2026, the narrative is shifting. According to a recent report by Colliers, the city’s commercial property sector is poised for a 10% rise in transaction deal value this year—marking what experts are calling a "measured recovery."

If 2025 was the turning point, 2026 is the year of capital deployment. Here’s a look at the drivers behind this rebound and what it means for the market.

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1. The Mainland "Big-Ticket" Wave

The most significant catalyst for this 10% growth is the resurgence of capital from Mainland China. In the final months of 2025, mainland investment hit its highest level in five years.

According to Thomas Chak, Head of Capital Markets at Colliers Hong Kong, mainland investors accounted for roughly 60% of "big-ticket" deals (transactions exceeding HK$100 million) toward the end of last year. This influx of liquidity is providing the necessary floor for prices to stabilize and begin their upward climb.

2. Capturing the "Repricing Window"

Real estate cycles are all about timing. After a six-year correction, many prime assets in Hong Kong—particularly Grade A offices in the Central Business District (CBD)—are seen as undervalued.

Institutional investors and family offices are moving now to capture these repricing opportunities before the window narrows. As interest rates soften and financing becomes more predictable, the "bid-ask" spread between buyers and sellers is finally closing, leading to a higher volume of completed deals.

3. Flight to Quality & New Growth Drivers

While the overall market is rising, the recovery is "measured" because it is selective. We are seeing a distinct "flight to quality," where tenants and investors are gravitating toward:

• Premium Grade A Offices: High-spec buildings in Central and Tsim Sha Tsui.

• The "Living" Sector: A surge in demand for converting underutilized commercial spaces into student accommodation and rental housing, driven by the influx of non-local talent and students.

• ESG-Compliant Spaces: Sustainability is no longer optional; it is a primary driver for international firms looking to meet global corporate standards.

4. Retail’s Experiential Pivot

The retail sector is also finding its footing by moving away from traditional luxury-only models. Growth in 2026 is being supported by:

• A robust mega-event pipeline that has revitalized tourism.

• Stabilized local consumption and a softer US dollar, making Hong Kong more competitive for regional visitors.

• The expansion of omnichannel retail, where brands use physical stores as "experience hubs" rather than just points of sale.

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The Verdict for 2026

While challenges like high inventory levels remain, the momentum is undeniable. With total investment value having jumped 12% to HK$39 billion in 2025, Colliers’ projection of a further 10% rise in 2026 suggests that the market has officially moved past its trough.

For investors, 2026 represents a strategic entry point—a year where "early-cycle" opportunities are still available, but the trajectory is clearly pointing up.

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Would you like me to break down the specific sectors—such as Office vs. Retail—to see which area offers the highest potential yield this year?