Commercial property sales rise to US$1.4b as investment deals pick up

This is a 28% increase compared to the same quarter last year.

Sales of commercial properties in Hong Kong rose 28%year-on-year to $10.87b (US$1.4b) in the first quarter as investment activities show signals of recovery, Real Capital Analytics has reported.

The first quarter also saw office deal volumes double, compared to the first quarter of 2020. This comes after political unrest and the pandemic dampened investment activities and prices in the city.

“While Hong Kong appears to be firmly in recovery mode, the trajectory of the recovery has been very gradual,” Benjamin Chow, RCA’s Head of Analytics for Asia, said.

“Investment activity remains well below levels in 2016-18, but there have been some bright spots in terms of pricing. Yields of CBD shops have dipped once again, while office pricing in Kowloon has also bottomed out.”

Meanwhile, this recovery in the commercial property market is seen in the Asia-Pacific region as investment activity across income-producing property types that slipped only 12% YoY to $229.87b (US$29.6b.)

Five out of the eight largest commercial real estate markets also posted higher levels of deal volume during the quarter with China taking the lead at $62.13b (US$8b), a 4% YOY increase.

“China emerged as the most active market, while momentum rebuilds in Hong Kong, Taiwan, and Singapore,” David Green-Morgan, RCA’s Managing Director for APAC, said.

“While Japan was the weakest link, this masks the resilient performance in Tokyo, which saw robust cross-border investor appetite.”

Sales in Singapore, Hong Kong and Taiwan each amounted to $11.64b (US$1.5b), $10.87b (US$1.4b), and $10.09b (US$1.3b). This reflected increases of 200%, 28% and 60%, respectively.

Japan, on the contrary dropped 46% in terms of volume, but still ranked second in the most active markets in APAC with $53.58b (US$6.9b).