Hong Kong Offices Face An AI Infrastructure Test As Tenants Move Upmarket

AI Turns Office Quality Into An Infrastructure Question

Hong Kong’s office market is facing a sharper divide as companies adopt artificial intelligence and reassess the buildings that can support that work.

Knight Frank warned that older office assets and landlords already under pressure could lose tenants to newer buildings with stronger energy, connectivity and technology infrastructure.

Lee Elliott, Knight Frank’s global head of occupier research, framed the issue as a building-standard problem rather than a simple leasing cycle.

He said offices expected to operate in an AI-heavy environment need energy resilience, energy supply, connectivity and technological infrastructure.

Those requirements add a new layer of capital planning for landlords whose assets were designed before AI workloads became part of corporate operations.

The age profile makes the pressure visible.

Nearly two-thirds of Hong Kong’s private offices will be over 30 years old by 2030, based on official data cited by Knight Frank.

JLL separately estimated last year that about a fifth of the city’s ageing buildings could face obsolescence, with lower value and efficiency.

Central Assets Pull Away From Older Districts

The shift is already showing up in leasing data.

Knight Frank said prime office spaces in Central recorded 10 per cent rental growth in the 12 months to April, helped by financial services demand, a flight to quality and future-proofing by large institutional occupiers.

Other office locations are not seeing the same support.

Rents outside those prime central assets grew by only 1.9 per cent in some areas and fell by as much as 13.3 per cent in others over the same period.

That spread points to a practical AI-era constraint: tenants that need resilient power, better connectivity and modern workplace infrastructure have fewer reasons to tolerate older buildings in outlying areas.

For landlords, the response is not limited to cosmetic refurbishment.

Some Hong Kong owners are expected to consider converting office space into student dormitories or senior living facilities.

Where full conversion is not possible, Elliott pointed to phased options, turnkey fit-outs and managed solutions for medium-sized occupiers.

The Office Becomes A Training Layer

AI also changes what companies may ask employees to do inside the workplace.

Elliott said offices could become learning hubs as organisations reskill and upskill staff on AI tools and practices.

Over the next 10 years, that could mean more event space, teaching rooms, university links and corporate training areas inside office buildings.

Paul Fisher, Knight Frank’s CEO for Greater China, added that AI investment may reduce headcount in some functions while creating new internal teams that check work produced by or assisted by AI.

His point narrows the workplace question: companies may need less space for some tasks, but better-configured space for AI oversight, training and collaboration.

The next test is whether landlords can fund upgrades or conversions quickly enough to keep tenants from concentrating in newer central buildings.

The concrete watchpoint is the gap between Central’s 10 per cent rental growth and weaker districts where rents rose 1.9 per cent or fell as much as 13.3 per cent in the same 12 months.