This general view shows cars on a motorway running between commercial buildings between the Admiralty and Wanchai areas of Hong Kong island, and a view of Kowloon (back, left) across from Victoria Harbour, in Hong Kong, May 12, 2021. (ANTHONY WALLACE / AFP)
HONG KONG – Investment in Hong Kong’s commercial real estate market will remain active, with transaction volume this year expected to be the highest since 2018, global real estate services firm Cushman & Wakefield said on Thursday.
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The easing of the coronavirus pandemic and an economic recovery led to more active investment activities in the city’s commercial real estate in the first half of the year. Eighty-nine deals totaling HK$43.1 billion (US$5.5 billion) were made, up 97 percent from the same period in 2020, the firm said.
“We expect the total number of transactions for this year to hit 200, which will be the highest since 2018,” said Keith Chan, Cushman & Wakefield’s Hong Kong head of research.
Office buildings recorded the highest transaction value of all commercial properties from January through June, accounting for 40 percent of the total
“But as investors remain cautious due to economic uncertainty, deals are expected to be mainly on the small size in the near term and total transaction value this year is projected to be half of the peak level in 2017 or 2018.”
Office buildings recorded the highest transaction value of all commercial properties from January through June, accounting for 40 percent of the total.
Industrial properties are considered the asset with the biggest investment value, given their relatively low price, favorable policies offered by the government and flexibility in usage. They contributed 30 percent of the total transaction value in the first six months of the year.
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“We believe that investment sentiment in Hong Kong’s commercial real estate will remain cautiously optimistic in the second half of the year,” Tom Ko, the firm’s executive director and Hong Kong head of capital markets, said.
Ko added that the city’s industrial assets will become more popular after restrictions on cross-boundary travel are relaxed, attracting more investors from the Chinese mainland.
In addition, Kwu Tung North project is expected to come into the spotlight with the scheduled construction of the new Kwu Tung Station in 2023. More investors and developers will pay attention to the area in the coming years with more development projects there, Ko said.