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Weekly Snippet | Increasing activity instils positive momentum in Hong Kong’s property market

Hong Kong’s real estate market has seen an increase in activity, especially in the office leasing and investment sectors. For occupiers, inspections have increased since Chinese New Year, and there is a greater consideration for Tsim Sha Tsui (TST) as a decentralisation move. For the investment market, developers have been actively looking for redevelopment opportunities. There have been six en-bloc transactions totalling HK$4.4 billion so far this year, showing investors remain confident of Hong Kong’s real estate market despite the pandemic. To See What Could Be, read this week’s market observations in our Weekly Snippet from our leading experts, Alex Lam of Office Services and Jason Fung of Valuation & Advisory Services.

A revival of letting activities in office leasing market

Post Chinese New Year, there has been a notable increase in letting activity across Hong Kong’s office sector. This has been widely reported and acknowledged by landlords as they have witnessed an increase in inspection rates. In addition, more leasing transactions were recorded across Central as the market saw the remaining whole floor at Two Pacific Place lease, and Nomura’s floor become mostly occupied. It is a good sign that activity is returning but it’s important to note that these transactions were completed at below market rental levels.

As a result of COVID-19, we have also seen corporates become more open to relocate and consider decentralisation with an increased focus on saving operational expenditure where possible. When tenants in Central look at alternatives, there is a greater appetite to not only consider options on Hong Kong Island in areas such as Wan Chai, Causeway Bay and Island East, but they will also consider cost-effective options in TST as a potential new location.

Real estate investors remain confident in Hong Kong

Hong Kong Resorts International (HKRI), which is controlled by the Cha family, has recently reached agreements with 17 sellers to purchase buildings on Hollywood Road and Upper Lascar Row in Sheung Wan, for a consideration of HK$47 million. The developer aims to create a new residential project in the emerging neighbourhood. The target properties (165-169 Hollywood Road & 8-12 Upper Lascar Row) have a total site area of 3,134 sq. ft. and could yield up to 28,049 sq. ft. of new housing by gross floor area. Due to their proximity to the Sheung Wan MTR station, they have the potential to not only be transformed into sought-after residential developments but also provide a strong return on investment.

Recovering investor demand and hopes of an end to the pandemic have driven an uptick in Hong Kong real estate deals. HKRI is not the only developer shopping for redevelopment bargains with wider interest in the industrial sector subsequent to the removal of the double stamp duty on non-residential property transactions in 2020, which led to six en-bloc investment deals totalling HK$4.4 billion so far this year. This shows that investor confidence is still present in the Hong Kong property market despite the pandemic.


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Alex Lam

Senior Director

Office Services

香港

林子明先生是香港區商業物業服務 高級董事。他在此領域已經超過 20 年經驗,他憑藉深厚的專業知識和市場經驗,多年來為各行各業的租戶和大業主提供全面的物業方案,成績有目共睹。不論是在歷史悠久的香港商業區,抑或是在新冒起的九龍區,他也能因應客戶需要物色理想據點,實現業務上的鴻圖大計。

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馮 禮賢

董事

Valuation & Advisory Services

香港

馮先生擁有超過12年於香港、中國內地、亞太地區的房地產經驗。他加入高力國際之前曾於一所國際性房地產和企業諮詢顧問公司任職副董事,專職負責大中華地區的評估及顧問服務。

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