Commercial property investments in Hong Kong up 51% to USD10.2b in 2021

But this is just less than half of the peak seen in 2017.

According to data from CBRE, HK$22.6 billion-worth of commercial real estate changed hands in Q4 2021 (deals worth over HK$77 million, excluding pure land or related transactions), bringing the annual total to HK$79.6 billion (approx. US$10.2 billion). This represented a 51% y-o-y jump from the HK$52.8 billion achieved in 2020 (approx. US$6.8 billion).

Investment volume, although surpassing the levels in 2019 and 2020, represented only 43% of the peak level in 2017 (HK$183 billion).

Here’s more from CBRE:

Industrial remained a sought-after asset class, with the sector accounting for 40% (HK$9.1 billion) of investment in Q4 2021. During the quarter, LINK REIT purchased two industrial properties for a total of HK$5.8 billion, the largest industrial deal on record. The sector also accounted for the lion’s share of investment in 2021, representing 37% of the year’s total investment volume.

Property funds and REITs contributed a total of HK$10.7 billion, or 47% of investment volume, in Q4 2021. Apart from active investment in the industrial sector, three property funds spent a total of HK$3.2 billion on several hotel properties.

Reeves Yan, Executive Director, Head of Capital Markets, CBRE Hong Kong: “Improved economic prospects, the successful containment of COVID-19 in Hong Kong and gradual recovery in leasing activity combined to ensure strong investment demand for commercial properties in 2021. Looking forward to 2022, we expect rents to see further growth in the retail property market, luring investors to treasure hunt for growth opportunities. Despite the upcoming supply boom, local investors may keep their eye on office floors while rents bottom out. Potential rate hikes in the U.S. will have limited impact on investment demand as high liquidity will likely lessen the pressure in Hong Kong in 2022.”