HKEX Listings By Chinese Firms To Help HK Office Market Recovery
HONG KONG – Gaw Capital Partners’ Chairman Goodwin Gaw believes the recovery of the Chinese territory’s office market in the next two to four years will be primarily aided by an influx of Chinese companies that intend to list on Hong Kong’s Stock Exchange (HKEX), reported Bloomberg on Tuesday morning (12 September, SGT).
The Head of the Hong Kong-based private equity firm, which has around US$36 billion in assets under management (AUM), thinks that Chinese investment banks and securities companies targeting business from bourse listings will replace global companies that are slashing their office footprint in the city.
“Hong Kong is going through a structural change”. As the Chinese territory becomes more integrated with mainland China, this gives it an advantage over cities like Shanghai, Gaw explained.
“A lot of [the office space] demand will come back, but it may not come from the multinationals or US banks.”
Gaw’s rosy outlook on Hong Kong’s office sector is a rarity among businesses operating in the city, where office vacancy levels have jumped to record highs due to a retrenchment by investment banks and the relocation of major companies to rival financial hubs, such as Singapore.
He revealed that the occupancy rates of Gaw’s office buildings in Hong Kong are still “pretty good,” ranging in percentages from the mid-80s to 90s. Currently, Hong Kong accounts for around 10 percent of Gaw’s portfolio, while properties in mainland China fell to about 25 percent.
However, Gaw Capital Partners, which has been buying Hong Kong commercial properties during the COVID-19 pandemic, is unlikely to purchase additional assets there, as it bides time for a recovery. Instead, Gaw is eyeing office assets in parts of the United States, where valuations have become very enticing.
“West Coast offices like San Francisco or Seattle will probably be the sector I’m most interested to invest into now, because I think it’s oversold,” explained Gaw, who expects companies there to encourage more of their staff to return to the office.
Meanwhile, Gaw considers commercial properties, including office buildings, in Singapore to be pricey.
“At the right time we’ll be selling,” he commented during the Forbes Global CEO Conference in Singapore that was held on Monday.