Office leasing activity in Kowloon strengthened in July, with larger occupiers accounting for an increasing share of transactions, according to Knight Frank. The property consultancy recorded 16 transactions exceeding 10,000 sq ft during the month, representing more than 55% of total office take-up.
Vacancy in Kowloon East edged down to 21.5% in July from 22.0% at the start of the year, while Tsim Sha Tsui vacancy fell to 7.3% from 8.1%, Knight Frank said. Relocations also increased to 40% of transactions, up from about one-third during the first half of 2026.
Kowloon East continued to capture the majority of relocation demand, particularly from occupiers seeking to remain within the district, supported by its substantial stock of available office space. Kowloon Central, and particularly The Gateway, remained among the most sought-after office locations.
The area’s harbourfront setting, established business ecosystem and prime location continued to attract corporate occupiers, especially Chinese mainland firms. However, competition from newly completed projects in West Kowloon is increasing pressure on landlords.
Landlords are responding by engaging tenants earlier in renewal discussions and offering more flexible leasing packages to improve retention. The consultancy said the combination of stronger demand for large floor plates, rising relocation activity and competition from new supply is creating a more active and competitive leasing environment across Kowloon.
Businesses will need to adapt to a more dynamic and competitive office market due to the shift towards larger occupiers and increased relocations. This could lead to more opportunities for companies to find suitable office space, but also increases the pressure to secure leases quickly. As a result, tenants may need to be more proactive in their search for office space and consider factors such as location, flexibility, and cost.
The consultancy’s findings suggest that the Kowloon office market is becoming more complex, with a range of factors influencing demand and supply. The market continues to evolve, and it will be important for businesses and landlords to stay informed about the latest trends and developments, including the office space expansion in other regions.
They will need to monitor the market closely to make informed decisions. With the increasing demand for larger floor plates, landlords may need to consider refurbishing or reconfiguring their existing spaces to meet the needs of these larger occupiers, which could further contribute to the market’s evolution.
