Hong Kong Property Investment Surge

Hong Kong Property Investment Surge 133%

HONG KONG – Data from Colliers showed that the overall property investment volume in the Chinese territory across all real estate sectors hit HK$41.1 billion (US$5.2 billion) in Q3 2022, reported Mingtiandi on Wednesday (12 October, SGT).

The real estate consultancy said this represented a 133 percent spike from Q2 2022 and a 119 percent surge from the corresponding period in 2021.

In particular, funds made up 72 percent or about HK$29.6 billion (US$3.8 billion) of the total real estate investment volume in the 3rd quarter, which witnessed a rise in properties that entered the market amidst a market rebalancing in mainland China and higher interest rates.

“The sharp US Fed interest rate hikes have lengthened investors’ decision-making process as they tended to wait-and-see, reducing the number of deals in the market,” commented Colliers’s recently appointed Research Head in Hong Kong, Kathy Lee.

“However, as the market gradually digests the rate hike news, and the government also relaxes the city’s quarantine measures, we expect investment sentiment will pick up in Q4.”

Major office deals in Q3 2022 include the HK$7 billion acquisition of the Goldin Financial Global Centre in Kowloon Bay by an unnamed buyer and the divestment of a 51 percent interest in 83 Wing Hong Street office development in Cheung Sha Wan for HK$3.08 billion by New World Development.

Colliers data also revealed that average office rents across key office submarkets in Hong Kong dipped 1.5 percent quarter-on-quarter to HK$57.90 psf per month in Q3 2022, while the office vacancy rate edged up 1.4 percentage points to 12.6 percent.

The ongoing decentralisation trend was evident in Kowloon East, which was the sole major office submarket that saw a consecutive increase in office rents in Q3, but the uptick was marginal at just 0.9 percent.

“We expect office rents will bump along at the current level until the end of 2022,” Lee forecasted.

For 2023, Colliers expects 3.3 million sq ft of new Grade A office stock would enter the market. “With more new and high-quality options, we expect flight-to-quality moves will further polarise Grade A vacancy within the same district, reflecting the significant variation in office building quality,” added Lee.

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