Newmark Group Ventures Into Hong Kong; Upbeat On Local Office Market
HONG KONG – Newmark Group, one of the largest listed commercial property consultancies in the US, has opened its 1st office in the Chinese territory, reported the South China Morning Post (SCMP) on Wednesday (27 April, SGT).
Notably, Newmark has taken up a coworking space in Atlaspace on level 16 of the Harbour City building in Tsim Sha Tsui. The office will accommodate 7 employees, most of them hired from Colliers and CBRE.
The Hong Kong outlet expands Newmark’s worldwide presence of 160 offices, with 6,200 staff and US$2.9 billion in revenue last year. But presently the Chinese territory’s economy and property market is languishing from the COVID-19 pandemic.
The company decided to set up a presence in Hong Kong while the city’s commercial real estate (CRE) sector is down, as Newmark is bullish that the world’s most expensive commercial property market would fully recover by 2023.
“We’ll still see a steady flow of capital from China coming into Hong Kong (later in 2022) for the right product,” said John Davies, Managing Director at Newmark Hong Kong.
Initially, Newmark will focus on the industrial and office properties, before adding retail to its services, revealed its executives.
“We expect Hong Kong’s office market to slowly pick up,” noted Davies.
However, commercial property deals in the city slumped by 46 percent quarter-on-quarter in Q1 2022, based on data from Colliers. Nonetheless, the deal value climbed 19 percent from the low base a year ago to HK$11.2 billion (US$1.4 billion), with half of the deals negotiated in 2021, added the real estate consultancy.
Previously, James was the Vice Chairman of advisory and transaction services in Hong Kong at CBRE. He brokered the biggest Grade A office rental deal in the city in nearly 2 years in April 2021, when Manulife Hong Kong agreed to occupy about 145,000 sq ft of office space at the International Trade Tower (ITT) in Kwun Tong.
Meanwhile, other real estate experts think that Hong Kong’s office market would rebound.
“As social-distancing measures have been relaxed recently, the office leasing and investment momentum are expected to have a mild growth in the third and fourth quarters of 2022, and the transaction volume for offices in Central is expected to have higher growth among other areas in the market,” noted Fiona Ngan, Head of office services at Colliers Hong Kong.
However, the prospects of the city’s overall commercial property market remain uncertain, as the time frame for a reopening of the border with China is not known.