The first eight months of 2026 saw a total of 3,494 sale and purchase agreements registered for commercial, office, and industrial properties across Hong Kong, according to data from the Land Registry compiled by Midland Commercial & Industrial Properties Research Department. This represents a year-on-year increase of approximately 14.5%, marking the highest level for the same period in nearly five years. However, the total transaction value reached approximately HK$36.2 billion, reflecting a 3.5% decline compared to the same period last year.
Ma Tai-yeung, Chief Executive Officer of Midland Group and Midland Commercial & Industrial Properties, stated that the year-on-year rebound in overall transaction volume for these properties indicates the market has moved beyond its low point, with buyers showing greater willingness to absorb properties that have undergone price adjustments. Despite this, the transaction value has not fully kept pace with the volume recovery, suggesting prices remain under pressure, with market activity primarily driven by reasonably priced properties with rental support and long-term appreciation potential. Looking ahead, monthly registrations for the commercial, office, and industrial property market are expected to hold steady at around 400 cases, while rental pressures are anticipated to gradually ease and stabilize.
Focusing solely on August 2026, the city recorded 410 sale and purchase registrations for commercial, office, and industrial properties, marking a 16.2% decline month-on-month. Transaction value amounted to approximately HK$4.57 billion, down 14.0% from the previous month, with the decrease in value slightly less pronounced than the drop in volume. Ma attributed the August pullback in both registrations and value to a normal consolidation following a surge in large-value transactions in July. While the number of significant deals did decline compared to July, several notable transactions still took place during the month.
A local family purchased the entire Henry Group Centre in Causeway Bay, along with a shop and parking space in a neighboring commercial building, for HK$892 million. Additionally, a buyer acquired the full Kowloon Funeral Parlour and an adjoining ground-floor factory unit for approximately HK$473 million. These transactions highlight that whole-building and special-purpose properties with redevelopment, operational, or long-term asset allocation value continue to attract interest from well-capitalized buyers.
Worth noting is that although August's registration figures for commercial, office, and industrial properties fell on a month-on-month basis, the market has now sustained monthly volumes of 400 or more for six consecutive months, the best performance since 2021. In that year, monthly registrations exceeded 400 throughout the entire year, with more than 500 deals recorded for seven consecutive months at one point. Ma believes that the stable volume of transactions indicates the market's trading foundation is strengthening. With price adjustments, sellers becoming more willing to offer negotiation room, and capital seeking investment properties with attractive returns, the commercial, office, and industrial property market is poised to build more solid recovery momentum. Currently, there are no clear signs of market weakness, merely a slowdown in the pace of transactions.
The office segment continues to serve as a key driver of the broader commercial, office, and industrial property market. In the first eight months, office transaction registrations totaled 896, a 20.9% year-on-year increase, the highest growth rate among the three major segments. The corresponding transaction value reached approximately HK$18.01 billion, up 10.5% year-on-year. Offices remain the only category among the three segments to achieve simultaneous growth in both volume and value, reflecting a sustained revival in investor interest in office properties.
For August specifically, office transaction registrations stood at 142, a 6% month-on-month decline, with value reaching approximately HK$2.45 billion, down 7.8% month-on-month. Ma noted that office transaction volumes remain relatively active, and the simultaneous rise in both volume and value over the first eight months signals that market absorption capacity for office assets is gradually recovering. Capital continues to flow predominantly toward premium-grade offices.
A high-floor unit at Concordia Plaza in Tsim Sha Tsui East sold for approximately HK$166 million, translating to a price of around HK$10,000 per square foot, marking the highest price for this type of office property in nearly two years. Meanwhile, a unit at Far East Finance Centre in Admiralty changed hands after being held for approximately six months, generating a paper profit of around HK$17.28 million, representing a gain of nearly 20%. Ma believes that the strong performance of select office transactions and resale cases demonstrates that quality offices in core areas, having undergone price corrections, are beginning to attract investors and end-users back into the market.
On the leasing front, the vacancy rate for Grade A offices fell further to 8.6% in August, hitting its lowest level since December 2020. In East Kowloon, the vacancy rate for Grade A offices dropped by 0.9 percentage points month-on-month to 16.3%, also reaching a post-October 2022 low. Moreover, rents for Grade A offices rose 0.9% month-on-month in August, bringing cumulative gains for the year to approximately 2.5%, suggesting that office rents are gradually finding a floor.
Ma pointed out that the continued decline in vacancy rates is a significant positive signal for the office market, particularly as areas like East Kowloon, which previously faced ample supply and higher vacancy pressure, now show notable improvement. This indicates that corporate leasing demand is gradually recovering. With a buoyant financial market environment, increased corporate expansion and relocation needs, and the gradual absorption of premium Grade A supply in core business districts, downward pressure on rents is expected to ease further, making quality office properties increasingly attractive in terms of investment value.
Turning to the shop segment, August transaction registrations reached 98, a slight 1% month-on-month dip, indicating that shop transactions remained broadly stable. However, transaction value fell to approximately HK$800 million, a 36.3% month-on-month drop, primarily due to a reduction in large-value deals. In the first eight months, shop transaction registrations totaled 816, up 13.5% year-on-year, while the value reached approximately HK$8.38 billion, down 22.5% year-on-year.
Ma believes that the year-on-year increase in shop transaction volume shows continued market interest in street shops located in residential consumption districts, areas with well-developed transport links, and stable rental fundamentals. However, the decline in transaction value indicates that buyers are primarily targeting properties with reasonable prices, attractive rental yields, and long-term redevelopment potential. As local retail and dining spending gradually stabilizes, coupled with the effects of tourist spending and festive peak seasons, this is expected to provide support for shop rentals in select core retail and residential districts.
In the industrial building segment, August transaction registrations came in at 170, a 28.9% month-on-month decline, the steepest among the three major segments, while transaction value fell only 5.8% month-on-month to approximately HK$1.31 billion. The significant drop in volume is mainly attributable to the high base effect from July, when industrial building transactions were relatively active and some deals were concentrated in registration. Nevertheless, August still saw a transaction exceeding HK$400 million involving the entire Kowloon Funeral Parlour and an adjoining ground-floor factory unit, which provided support to overall registration value.
For the first eight months, industrial building transaction registrations totaled 1,782, an 11.9% year-on-year increase, continuing to be the most actively traded segment among the three categories. The total value reached approximately HK$9.81 billion, down 5.8% year-on-year. Ma noted that the steady number of transactions in the industrial building market reflects sustained demand from owner-occupiers, small and medium-sized enterprises, and investors for practical industrial and warehousing properties. With gradual improvement in industrial building leasing demand and some owners offering more attractive negotiation margins, this is expected to help keep industrial building transactions active.
Looking ahead, Ma believes the commercial, office, and industrial property market remains in a recovery phase where volume leads the way and prices are gradually seeking a bottom. New developments such as iCITY and 83 Wing Hong Street still have unsold units to be absorbed. If developers continue to launch projects with market-close pricing and flexible payment arrangements, this should continue to attract end-users and investors, providing support for future registration figures. The recent recovery is underpinned by multiple factors, including monthly registration volumes holding firm for several months, gradually improving vacancy rates for both Grade A offices and industrial buildings, recovering office rents, and strengthening market absorption capacity for quality assets in core areas. Monthly registrations for the commercial, office, and industrial property market are expected to remain at around 400 cases, with rental pressures gradually easing and stabilizing. Among these, office properties featuring prime locations, quality management, convenient transport, solid rental fundamentals, and attractive pricing are likely to remain the primary targets for substantial capital and long-term investors.