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About one-fifth of office buildings are at risk of functional obsolescence by 2035, necessitating timely upgrades to maintain competitive edge
(Left to right) Cathie Chung, Senior Director of Research; Chung Chi-hung, Head of Property and Asset Management
HONG KONG, 26 May 2025 – Nearly half (44.0%) of Hong Kong’s Grade A office space is now over 30 years old, with this proportion expected to increase to 55.1% by 2030. Approximately one-fifth of these buildings are potentially facing functional obsolescence by 2035, making it difficult to attract tenants, according to JLL’s latest research report, “Smart Upgrades for Big Impact: Protect the Value of Your Real Estate Assets.”
The capital and rental values for Grade A offices are projected to decline by over 10% by 2026, with poorly maintained office buildings over 30 years old potentially experiencing declines of up to 20%.
Cathie Chung, Senior Director of Research at JLL, said: “About 97.4% of Grade A office stock in Hong Kong’s CBD was competed before 2015, the highest amongst global gateway cities. With the aging office stock, the market is expected to see an influx of 8.3 million sq ft of new Grade A office supply over the next five years – equivalent to the cumulative net absorption of the past decade – further intensifying competition. Aged office buildings that fail to undergo timely upgrades and refurbishments will struggle to meet rising tenant expectations, facing rental pressure, increasing vacancy rates, reducing operation efficiency, and declining asset values,”