Hong Kong Commercial Property Transactions Down 39%
HONG KONG – Data from Midland IC&I shows that the number of completed commercial real estate (CRE) deals here declined significantly in the past few months, reported the South China Morning Post (SCMP) on Monday afternoon (21 November, SGT).
Between July and October 2022, commercial property transactions fell by 39 percent year-on-year to 1,357 units. For the real estate agency, these assets consist of office space, retail units, and industrial premises.
In addition, Midland IC&I reduced its forecast by 15 percent for the entire year to 4,700 commercial property deals. The figure was the lowest since 2020 when only 3,799 transactions were registered. The number is also a far cry from the peak of 18,063 recorded in 2012, before the massive demonstrations in 2019 and the COVID-19 outbreak that started in 2020.
“The industrial property, office, and shop market can hardly be expected to return to the previous peak in the short term despite a mild improvement in October,” said Tony Lo, Chief Executive of the ICI Property subsidiary of Legend Upstar Holdings, Midland IC&I’s parent firm.
Notably, Hong Kong’s commercial property market has been impacted by the Chinese territory’s sluggish economy, which has weakened for 3 consecutive quarters.
Last week, the authorities downgraded their GDP growth forecast for the whole of 2022 to -3.2 percent from the prior prediction ranging from -0.5 percent to 0.5 percent, amidst a deteriorating external environment and ongoing COVID-19 pandemic.
Aside from that, commercial property investors were let down by Hong Kong Chief Executive John Lee Ka-chiu’s policy address in October, as his speech failed to tackle the relaxation of COVID-related measures that are needed to encourage visitors to return and revive business activities.
Furthermore, “the recent fluctuations in the Hong Kong stock market may also have affected investors’ confidence on the market outlook,” Lo added.