Investors target HK retail properties with yields over 5.5% amidst rate cuts

A recent transaction yielding over 5.5% is a ground-floor unit in the Prince Commercial Building.

Real estate investors are looking for retail properties in Hong Kong with yields above 5.5% amid potential rate cuts.

According to Knight Frank, these properties still exist in the city despite the retail market downturn, citing the acquisitions of KF88 in Kwai Chung and the retail section at Alto Residences in Tseung Kwan O.

"The rental return was above 6%, with occupancy rates at almost full capacity," Knight Frank reported.

Another example is the sale of a ground floor unit in the Prince Commercial Building for HK$52.5m, yielding 5.6%.

Meanwhile, Knight Frank also reported that the leasing market may find relief with Chinese Mainland EV brands expanding into Hong Kong's retail market, targeting visible locations like Wan Chai and Kowloon Bay.

"Some motor operators are also renting short-term exhibition space in shopping malls to test market sentiment without committing to long-term leases," Knight Frank added.