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Colliers releases Quarterly Reports for Q1 2021

HONG KONG, 15 April 2021 – Leading diversified professional services and investment management firm Colliers (NASDAQ and TSX: CIGI) has today released the Quarterly Reports for Q1 2021 to evaluate Hong Kong’s office leasing and property investment markets. The Quarterly Reports explore factors affecting both sectors and their hidden opportunities.

Despite the overall negative net absorption of office space recorded at -459,400 sq. ft. NFA as of Q1 2021, office leasing sentiment has slightly picked up. The overall Grade A office rents dropped by 2.0% QOQ in Q1 2021, the lowest drop over the past three quarters which demonstrated the pace of rental correction moderated. There have been more enquiries and inspections witnessed across different submarkets, particularly around the CBD area.

For the property investment market, total investment volume reached HK$10.1 billion (US$1.3 billion) in Q1 2021, up 30% YOY. Transaction volume saw positive YOY growth in office, industrial and retail sectors. Institutional investors have become more active where their transactions accounted for over half of the total investment volume in Q1 2021. Most of them favoured industrial assets.

“The implementation of the vaccination programme globally should help control the pandemic. Therefore, we expect demand for office space to further pick up in the second half of this year, with the Grade A office market leasing momentum gradually improve,” said Rosanna Tang, Head of Research, Hong Kong and Greater Bay Area.

“We also expect to see the investment market sentiment to further recover and bring for a higher level of transactions for this year, especially comparing to the low base of 2020,” added Tang.

2021 office leasing market remains tenants centric

We forecast overall and CBD rents to fall 7% and 8% YOY, respectively in 2021. International finance and MNC firms continued to show signs of downsizing and have relocated some of their workforce to non-core locations. Pockets of demand is seen from PRC Occupiers, and some MNC wealth management, private banking and law firms.

“We have seen more inspection activity taking place across the market in Q1, as some occupiers were looking to take advantage of the lower rents and wider available options. To better secure office occupancy, we recommend landlords to be more flexible leasing,” said Chris Currie, Head of Occupiers Services, Hong Kong.

Defensive assets to generate long-term income

Among the total investment transaction volume of HK$10.1 billion in Q1 this year, 53% were industrial assets, including cold storage and data centres. This was backed by the long-term macro drivers such as the growing 5G network, cloud computing, e-commerce and the rising F&B demand. In addition, 69% of the retail transactions concluded in Q1 were neighbourhood retail assets.

“Over the past quarter, we observed  increased investment activities from both local and overseas investment fund managers, with most of them acquiring industrial properties under their portfolio for seeking long-term returns. We recommend investors pay attention to defensive assets, such as industrial properties and retail malls which could generate long-term growth potential,” said Stanley Wong, Senior Executive Director, Capital Markets & Investment Services.

Solid investment appetite and government initiatives to facilitate transaction rebound

We expect the transaction volume to continue to rebound in the second half of 2021. Growing investment appetite from Mainland and local investors is now being amplified by a return of institutional investors, as well as the recent changes in government policies.  

“With the solid investment appetitite, we believe the bid-ask spread could narrow in the second half of 2021, where sellers will become more realistic in their asking price during negotiation,” said Thomas Chak, Executive Director, Capital Markets & Investment Services.

Recent changes in government policies should provide some positive spins to the investment market 

“The removal of the double stamp duty on non-residential property transactions implemented in November 2020 lowers the entry cost for commercial transactions. Moreover, the pilot scheme for charging land premiums at standard rates for lease modifications for industrial properties redevelopment should streamline approval process, while allowing investors to better estimate the redevelopment cost,” added Chak.

Find out more about how the office leasing and property investment sectors performed during Q1 2021 and explore their hidden opportunities by downloading the Colliers Quarterly Reports for Q1 2021: office leasing and property investment.


Related Experts

Stanley Wong

Senior Executive Director

Capital Markets & Investment Services

Hong Kong

Stanley is an industry-leading real estate professional with over 20 years’ experience working in Hong Kong’s property investment market. During this time, Stanley worked as an Executive Director and the former Head of Capital Markets for a competitor from 2012 to 2020 where he handled over HK$20 billion in transaction value

Stanley has a bachelor’s degree in Surveying and an MBA from the University of Hong Kong. Since completing his educational studies, Stanley has continued his professional development to become a member of the Hong Kong Institute of Surveyors and RICS.

Stanley’s transactional background and core skill set includes handling tenders and auctions for major assets such as retail podiums, enbloc buildings, development sites, major shopping centres, grade A offices and luxury residential. He also has experience on property acquisitions and disposal for major developers, investors and end-users in Hong Hong, as well as overseas institutional investors.

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Thomas Chak

Executive Director

Capital Markets & Investment Services

Hong Kong

Being an award-winning industry specialist, Thomas is highly regarded amongst his peers and clients with over 18 years’ property investment experience. The key client focus of Capital Markets remains institutional clients, local investors and developers, family offices and private high net worth individuals as well as PRC inbound capital. 


Thomas develops and fosters partnership and consultancy based approaches to clients, resulting in improved profitability through high client retention rates and improved business profile. 


Thomas has joined Colliers as Executive Director of Capital Markets in July 2019. In a way, this is a homecoming for Thomas as he was with Colliers’ Capital Markets team between 2006 and 2008.  Prior to joining back Colliers, he was with Knight Frank as Senior Director of Capital Markets, where he completed transactions of over HK$8 billion.   

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Rosanna Tang

Head of Research, Hong Kong & Greater Bay Area


Hong Kong

Rosanna Tang leads the research team in Hong Kong and South China in Colliers. Driving different research papers and client-orientated initiatives, Rosanna has a deep understanding of all property sectors, research products, and client requirements. Rosanna is also one of the spokespersons in the company, and she frequently speaks in different industry events and media interviews. 

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