What is Hong Kong’s headquarters economy – and how it drives a commercial property upswing

Hong Kong’s so-called headquarters economy, in which the city serves as a regional and global base for corporate headquarters, is spurring recovery in the commercial real estate sector as analysts forecast an improved investment environment this year.The city’s battered office market showed signs of stability in 2025, with 2.1 million sq ft (195,000 square metres) of net absorption for the full year, the largest annual total since 2018, according to CBRE.Central recorded the biggest improvement with 234,800 sq ft of net absorption in the fourth quarter, its highest since the second quarter of 2015. The full-year figure reached 496,000 sq ft, the strongest annual total since 2007, CBRE added.Alongside the pickup in leasing, overall office rents fell 2.9 per cent year on year, the smallest annual decline since 2019, the property consultancy added.The improved demand for office space coincided with a record 1.56 million locally registered companies by the end of last year, up 96,609 from 2024. Of these, 195,343 were newly registered or redomiciled firms, while 15,586 were new non-Hong Kong companies setting up in the city.“The [headquarters economy] reinforces demand for premium office space, especially well-located, high-quality buildings that support regional management, capital markets and professional services functions,” said Eric Tsang, acting head of valuation and advisory services at Colliers. “This has helped stabilise leasing across the office market and created renewed interest in prime and quality office assets, even as the broader office sector continues to adjust.”Central recorded the biggest improvement with 234,800 sq ft of net absorption in the fourth quarter, its highest since the second quarter of 2015. Photo: Jelly Tse