Hongkong Land Holdings Ltd, the biggest commercial landlord in Hong Kong’s financial district, is seeing a recovery in the city’s office market.

“There has been an uptick in inquiries in the first half of this year, particularly in the second quarter. So I think that’s a positive sign,” Chief Financial Officer Craig Beattie said in an interview, referring to leasing interest in the company’s office space. “The market spot rents are stabilized.”

The developer still anticipates negative rental reversions — leases signed at lower rates — but it expects the size of the reversion to narrow over time, Beattie added.

The Hong Kong Special Administrative Region’s office market has been going through a challenging time in the past few years as demand shrinks amid an increase in supply. Office rents are at the lowest in more than 15 years, data from Colliers International show.

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Average office rents in Hongkong Land's portfolio decreased to HK$95 ($12.10) per square foot at the end of June, compared with HK$103 the previous year, according to its interim results announced Tuesday.

Its underlying profit, excluding Chinese mainland non-cash provisions, rose 11 percent in the six months ended in June from a year earlier.

The real estate firm’s recent shift in strategy to focus on commercial property and share buybacks have boosted investor confidence. Hongkong Land’s shares have gained more than 43 percent since the beginning of the year, making it one of the best performers among its peers. In comparison, the Hang Seng Properties Index is up about 26 percent this year.

In its biggest pivot in years, Hongkong Land announced a strategy last October to forgo residential development. The firm will eventually set up real estate investment trusts to establish recurrent income with management fees.

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The firm set a target to generate $4 billion in recycled capital by disposing of non-core assets by 2027. It has attained 33 percent of this target, including selling part of an office tower in the HKSAR for $810 million in April, with proceeds going to enhance its properties, debt payments and share buybacks. The company also reached 67 percent of its $200 million share buyback program by December.

Hongkong Land, a subsidiary of conglomerate Jardine Matheson Holdings Ltd, owns office buildings and shopping malls in the Hong Kong SAR, Singapore and the mainland. It is Central’s biggest landlord with multiple walkway-connected towers housing the likes of JPMorgan Chase & Co in the heart of the financial district.