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Peggy Ye

When Alex Barnes and his team finally closed the two largest single-tenant office leasing deals Central has seen in more than a decade, the outcome was decisive – but the path there was anything but quick.
Barnes, the co-CEO in Greater China and managing director in Hong Kong, Taiwan and Macau at JLL, advised quantitative trading firm Jane Street Asia on a record-setting lease at Central Yards, followed months later by a six-floor commitment from hedge fund Qube Research & Technologies at Two International Finance Centre. Together, the transactions marked the biggest single-tenant office commitments in Central in 10 years.
They were struck against the backdrop of a prolonged downturn that left Hong Kong’s office market deeply impaired. Citywide office vacancy is hovering around 17 per cent, while grade A office rents last year were down 41 per cent from their first-quarter 2019 peak, reflecting years of weak growth, geopolitical uncertainty and fading demand.
Before the slump, Central’s most sought-after towers were effectively full. “We used to see a waiting list for office space at Two IFC between 2016 and 2019, even though it commanded the highest rents in the market,” Barnes said. “That demand disappeared after the Covid-19 outbreak.”
For Barnes, an Australian national with more than two decades in Hong Kong’s property market, the challenge was less about timing than staying close to clients through the downturn. “We had been working on several major office requirements, including the Central Yards deal, but no one else knew when or whether those deals would actually close,” he said.

Barnes said sentiment began to turn early last year as wealth management remained strong and other parts of the financial sector started to show early signs of recovery in early 2024. “We saw light at the end of the tunnel early in 2025 as our ongoing client work was building momentum,” he said.
As the pace of rental declines slowed in the second half of last year, the two transactions took on wider significance. “The two big deals last year were definitely milestones,” Barnes said. “They certainly put a stake in the ground that signified the market has bottomed.”
Hedge funds have emerged as a leading driver of the rebound, accounting for about 18 per cent of office leasing last year. “The access to capital, the access to talent, the access to mainland China are all tailwinds,” Barnes said.
Barnes said some investors who had ruled out Hong Kong on geopolitical grounds were now returning. “With geopolitics also comes an increased look at diversification around the world,” he said. “And this part of the world has suddenly become in favour in some financial markets, which is going to encourage more companies to set up and operate here.”
Unlike the rebound after the 2008 financial crisis, when rents snapped back as vacancy tightened across the market, Barnes said this recovery is being shaped by a sharp split between top-tier assets and the rest. Even with vacancy above 10 per cent, large occupiers seeking space in Central’s best buildings have few real options. “It feels crowded from the big-occupier perspective,” he said.

That divergence is increasingly reflected in rents. In Central, the gap between a few top-tier offices and standard prime buildings has widened to about 44 per cent, underscoring how sharply tenants are differentiating between assets.
The shift is putting pressure on older stock. About 43 per cent of Central’s grade A office space was more than 30 years old, Barnes said, forcing landlords to weigh costly upgrades or redevelopment to stay competitive.
The contrast is already visible, with The Henderson, a new flagship tower in Central, reaching about 90 per cent occupancy, even as vacancy remains elevated elsewhere in the district.
Beyond Central, the outlook is more subdued. More than 3 million sq ft (278,700 square metres) of new grade A supply due in 2026-27, including International Gateway Centre in West Kowloon and One Causeway Bay, is expected to cap rental growth and keep citywide vacancy above 14 per cent.
Barnes said the recovery would unfold unevenly. “It’ll be stages,” he said, with demand concentrating first in Central’s top-tier buildings before gradually filtering into other districts, leaving decentralised areas under pressure for longer.
Even so, vacancy in Central’s top-tier stock is projected to fall from about 14 per cent to below 10 per cent, supporting modest rent growth. The recovery, Barnes said, was real but selective. “The market itself is definitely sustainable,” he said. “There’s an acceleration towards better outcomes than we’re currently forecasting.”


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Alex Barnes says the two big deals “certainly put a stake in the ground that signified the market has bottomed”. Photo: Edmond So

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JLL’s Alex Barnes and his team closed decade-high single-tenant leases – deals that took on wider significance as rental declines slowed


JLL’s Alex Barnes and his team closed decade-high single-tenant leases – deals that took on wider significance as rental declines slowed.


China

Hong Kong economy

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Global Financial Crisis of 2007-2008

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Jane Street Asia

How 2 landmark Central deals boost sentiment in Hong Kong’s office market

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}JLL’s Alex Barnes and his team closed decade-high single-tenant leases – deals that took on wider significance as rental declines slowed

JLL’s Alex Barnes and his team closed decade-high single-tenant leases – deals that took on wider significance as rental declines slowed