Hong Kong Commercial Property Market To Gain From Border Reopening
HONG KONG – Colliers thinks that the Chinese territory’s commercial real estate is poised to benefit from the reopening of the borders between Hong Kong and mainland China as well as the relaxation of COVID-19 measures in the latter, reported CNBC on Thursday afternoon (12 January, SGT).
According to the property consultancy, Hong Kong’s commercial real estate market will be on a path to recovery this year.
However, Colliers’ Head of valuation & advisory services in Hong Kong Hannah Jeong expects the retail property market, particularly the high street shop segment, to be the top beneficiary in terms of both rent and selling prices.
“We are looking at about an 8 percent increase year-on-year, in terms of the retail rental performance,” she said. But this figure is still around 25 to 30 percent lower than pre-pandemic levels.
Meanwhile, Hong Kong’s office market would benefit to some extent, with rents of Grade A office space in the city forecasted to rise by 3 percent for the whole of 2023 due to “pent-up demand from Chinese and overseas companies.”
While the office vacancy level in the city remains high at 14.7 percent, “it’s not the end of the world because… compared with other peer cities, 8 percent to 10 percent is a generally reasonable number,” she explained.
However, Colliers said there are still some possible headwinds in 2023 that could affect the recovery of Hong Kong’s commercial property market. These include a potential global recession and continued geopolitical tension
“We are looking at a more cautiously optimistic view for 2023. There will be different uncertainties from external factors but borders opening is surely the one of the boosters for many other sectors within the property market,” Jeong added.