,Hong Kong

What’s the most sought-after real estate asset in Hong Kong?

These assets accounted for 38% of property investments in Q3. 

Commercial real estate transactions in Hong Kong amounted to HK$19.8billion (approx. US$2.5 billion in Q3 2021 (deals worth over 77 million, excluding pure land or related transactions). According to CBRE, this represents a 28% decline from the previous quarter, when volumes were elevated because of the HK$10.5 billion KITEC sale in Kowloon Bay. 

A huge portion of these investments (38% or HK$7.6 billion) were funnelled into industrial assets. This figure already surpassed the total consideration of industrial transactions in 2019 and 2020 combined. 

Meanwhile, the office sector accounted for 29% (HK$5.9 billion) of the investment volume in Q3. 

CBRE says property funds remained active this quarter, spending HK$3.6 billion on commercial properties. Major deals included Silkroad paying HK$1.1 billion for multiple floors in Hang Wai Industrial Building in Tuen Mun. 

Reeves Yan, Executive Director, Head of Capital Markets, CBRE Hong Kong, said: “The ample availability of capital ensured a high level of purchasing power in Q3 and further down the line in 2021. Counter-cyclical assets such as shopping malls, street shops and hotels as well as en-bloc industrial assets with transformation or redevelopment potential will continue to interest institutional and local investors alike.”

 

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New home sales dropped 31.4% during the month.
This is due to elevated supply levels and uncertain demand from the Mainland.
The growth will be more prominent in Japan, Australia, and Hong Kong.
There were 17 major deals worth over US$12.8m each.
Private equity investors’ interest in offices will drive investment demand.
Savills expects rents of outlying business parks to bottom out soon.
Data centres accounted for 34% of all investments during the quarter.
Luxury brands are still wary of going to the high streets.
Q3 Grade A office rents increased 0.7% for the first time in five quarters.
Average multifamily asking rents dropped 3.6% over the year. 
Rents declined in all major submarkets while Kowloon rents proved more resilient.
Sales were propelled by the residential sector.
22% of all residential launches in H1 2021 were from the affordable segment.
But Colliers says transactions may pick up in Q4.