The luxury home market has seen record-breaking transactions in recent months, as buyers’ confidence continues to return due to improving market conditions. In recent weeks, we have seen a new trend emerge in car parking spaces, with a full space at Mount Nicholson reportedly being sold for a record-breaking price. Matthew Cheng of Capital Markets & Investment Services expects this trend will continue to be a focus, and on the office leasing front, Ivan Wong of Office Services has seen a rise in leasing activity in Kowloon East. Read on to find out more from our experts.
Parking spots become the investment market’s focus
Apart from residential and retail spaces, car parks have become a recent focus for real estate investors. Several in Mount Nicholson are reported to have been sold for over HK$10 million, which has surprised even the more seasoned stakeholders due to the unexpected high price. Instead of selling just the individual car parking spaces, a whole car park attracts wide attention – especially from local capital - due to the wider development opportunities, and the potential for stable, higher returns.
In the first half of 2021, three different car parks in Tseung Kwan O, Chai Wan and Tsuen Wan are reported to have also been sold. Moreover, followed by the passing of Mr. Tang Shing-bor, a car park under his portfolio received great interest with over five local investors competitively bidding with the final sale process estimated to be around HK$140 million - representing around HK$2 million per space. Riding on this hot market sentiment, two car parks in Pokfulam and Wong Chuk Hang held by New World Development and Melco Group respectively have now been put on the market for sale.
Owing to the stability of income, high market demand and the flexibility in layout, it is estimated that car park spaces will thrive as a sought-after asset type in Hong Kong.
Kowloon East leasing heats up
The Kowloon East sub-market has recently become heated due to landlords in the area becoming more aggressive since the start of the second quarter of 2021. With the flexible sizing requirements, as well as forced relocations due to building redevelopments, we witnessed that more occupiers are looking for cost-effective options, which makes property in East Kai Tak desirable. An online fashion website operator has recently committed to a whole floor in International Trade Tower, with the expansion of their business tripling their office spaces, making the cost-effective options a simple decision.
However, there are some ongoing negotiations in Kowloon East with potential occupiers which may have an impact on some landlord’s outlook as we see the potential for them to adjust their leasing policy, post these transactions.