Hong Kong property investment drops 46% to USD1.4b in Q1

Almost half of the transactions were from the industrial sector.

Investor sentiment in Hong Kong’s property sector was affected by various factors, including global geopolitical tensions and stock market volatility. 

According to data from Colliers, investment volume for Q1 dropped 46% QoQ to HKD11.2 billion (USD1.4 billion), but increased 19% YoY due to a low base effect. The industrial segment accounted for the bulk of transactions in Q1 with 14 deals worth HKD4.2 billion (USD542 million) recorded. 

Here’s more from Colliers:

While office transactions remained muted, the quarter saw an uptick in interest for attractively priced hotel assets amid bets they could generate steady revenue after being converted into co-living or quarantine facilities in the near term, or resume attracting tourists once borders reopen.

Forecast

Despite market uncertainties, we expect investor interest for quality assets to sustain and we expect the investment market to gradually recover in H2. Transaction volumes will likely pick up once Covid-19 restrictions are relaxed as planned. 

Industrial assets are likely to be sought after, helped by the sector’s resilient rental performance amid growing demand for data centres and cold-storage facilities. Meanwhile, the flexibility of hotel assets will also attract institutional investors in 2022 while local investors are likely to remain focused on retail premises.