Between the fourth quarter of 2022 and the same period in 2023, Hong Kong's office market witnessed a notable downturn. According to the Hong Kong Property Review 2024, overall office prices fell by 7.8%, with varying degrees of decline across different grades. Grade A offices saw a modest decrease of 2%, while Grade B and C offices experienced more pronounced drops of 11.5% and 7.9%, respectively. Rent trends also fluctuated throughout the year, reflecting the challenging economic environment.

The performance of Grade A office prices exhibited a mixed trend. After showing some growth in the first quarter, they declined by 2% in the fourth quarter of 2023 compared to the same period in 2022. Similarly, rents for these premium spaces eased over the year, with a slight decrease of 1.7% from Q4 2022 to Q4 2023. This suggests that even high-end properties were not immune to market pressures.

Grade B office prices started the year on a weak note but showed signs of recovery in the second quarter. However, this momentum was short-lived, as prices plunged sharply later in the year. By the end of 2023, Grade B offices had dropped by 11.5% compared to the fourth quarter of 2022. Despite the price volatility, rents for these mid-tier offices registered a mild increase of 0.7% year-over-year in Q4 2023, indicating some resilience in demand.

Grade C office prices followed a similar pattern, dipping in the first quarter before stabilizing in the second. However, they continued to decline in the remaining quarters, ultimately falling by 7.9% between Q4 2022 and Q4 2023. Rents for these lower-tier offices also faced challenges, with a moderate drop in Q1 2023 followed by gradual increases before declining again in the final quarter. Nonetheless, they managed to post a mild increase of 0.6% in Q4 2023 compared to the same period in 2022.

In conclusion, the Hong Kong office market faced significant challenges in 2023, with all grades experiencing price declines. While rents showed some resilience, particularly in the mid and lower tiers, the overall trend points to a weakening market. The data underscores the need for businesses to carefully evaluate their real estate strategies in response to these shifts.