Hong Kong property investments soar 95% in H1

Investment volume in APAC commercial properties reach US$83.5b in the same period.

The investment volume for real estate investments in Hong Kong climbed 95% year-on-year (YoY) in the first half of the year, JLL reported.

Amongst the major drivers is the industrial sector, which saw a 204% YoY investment volume growth over the said period despite the social tensions in the city as well as the COVID-19 impact on the property sector.

“In the first half of this year, we saw investors taking advantage of the upswing across the Asia Pacific—especially in Hong Kong’s industrial sectors,” JLL in Hong Kong Head of Capital Markets Oscar Chan said.

“We expect that investors will keep an eye on neighbourhood retail and industrial properties in the second half of this year.”

In the Asia Pacific, as a whole, the investment volume of commercial real estate rose 39%YoY to US$83.5b with China, Australia, and South Korea accounting for 69% of the total investment volume.

JLL also noted that the office sector made up 31% of the capital flows, followed by logistics and industrial, and retail investment trade (30%).

“Asia Pacific real estate investment is clearly back as investors reaffirmed their positive outlook, ensuring a sizable upswing in YoY volume in the first half,” Stuart Crow, CEO of Capital Markets at JLL in Asia Pacific, said.

“We expect further activity in the second half of 2021 as investors look to portfolio deals, corporate sale and leasebacks, and seek more diversification into sectors like logistics and industrial, life sciences, and multifamily.”

Logistics and industrial investment in the Asia Pacific surged by 215% YoY in the second quarter to US$15b, supported by favourable demand dynamics driven by e-commerce expansion regionally, relative yield spreads and investors’ desire to diversify into more resilient assets classes.

Major transactions, including the acquisition of the Milestone portfolio by ESR from Blackstone in Australia, were indicative of the demand for high quality logistics and industrial assets in the region.