HK Commercial Property Investments Soared 168% In Q4

HONG KONG – Commercial property investments in the Chinese territory surged in Q4 2020 by 168 percent year-on-year to US$2.98 billion, reported Mingtiandi on Tuesday (9 February), citing data from Real Capital Analytics (RCA).

While the number accounted for more than one-third of 2020’s overall figure, the full year tally of US$8.6 billion represents a 43 percent plunge from the total volume in 2019, according to RCA’s latest Asia Pacific Capital Trends.

“Like 2019, Hong Kong’s journey can again be described as a tale of two halves. The first was largely a continuation of late 2019: large deals disappeared, occupancies and rentals under pressure, no cross-border interest whatsoever,” noted RCA’s Analytics Manager for Asia Pacific, Benjamin Chow.

“By midyear, pricing of commercial properties began to look more attractive, having fallen almost 20 percent from the peak a year before. Resultantly, deal activity began to creep back upwards, and overseas investors returned.”

Hong Kong’s largest building transaction for 2020 was concluded during the last days of the year, as a consortium comprising Gaw Capital, Manulife, Schroder Pamfleet acquired the 21-storey Cityplaza One office tower for US$1.27 billion.

The major deal came after several smaller commercial property sales in Q4. Among them was Sun Hung Kai’s divestment of a retail podium within its Downtown 38 residential project in Ma Tau Kok for roughly US$38 million. Investor David Chan also sold a 4,000 sq ft office unit at The Center within the Central District for about US$16 million.

Meanwhile, statistics from RCA showed that commercial property sales in Singapore reached US$641 million in Q4, down 68 percent from the same period in 2019. For the whole of 2020, transaction volume plunged 73 percent on an annual basis to US$3.3 billion.

For the entirety of Asia Pacific, commercial property deals in Q4 only slipped by about 10 percent year-on-year to nearly US$44.7 billion, pushing 2020’s full year tally to almost US$141.22 billion, down 23 percent from 2019’s total.

“After a truly bleak and uncertain start to 2020, the market has steadied and in the fourth quarter we saw a welcome rebound. This bodes very well for activity in early 2021 as we saw a number of deals across the region roll over into the new year,” said RCA’s Managing Director for the region, David Green-Morgan.