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Weekly Snippet | Cryptocurrency and industrial investment heat up

The latest Colliers Weekly Snippet features James Lai of Office Services as he discusses what the expansion of cryptocurrency trading platforms could mean to Hong Kong SAR’s office leasing market. And in the investment market, Russell Lam of Capital Markets & Investment Services comments on the increase in investment activity as August heats up. Read on for the on-the-ground observations by our experts.

What does the rise of cryptocurrencies mean for the office market?

Hong Kong’s economy and business environment are renowned for supporting safe, regulated, and a structured flow of capital. Hong Kong as a platform has enabled major start-ups such as WeWork, Uber and Alibaba to expand aggressively, absorbing large amounts of office space in the process. WeWork has taken over 100,000 sq. ft., Uber took a floor in the Leighton Centre and Alibaba took 100,000 sq. ft. in Times Square. 

The next round of start-ups on the agenda for Asia’s leading financial hub is cryptocurrency trading platforms. Huobi, Bitmex and Binance are looking to expand their footprint in Hong Kong due to the city’s ability to facilitate the free flow of capital worldwide. And leveraging the city as a platform, like WeWork and Uber, there is no doubt these cryptocurrency businesses will thrive as they have done in London, New York, and Tokyo. 

Interestingly, the entry requirements to be a crypto platform is low, just like the creation of a crypto currency itself. It is also important to note that there are limited restrictions to trading cryptocurrency, and following in the footsteps of Bitcoin, it’s anticipated that this industry will grow quickly in Hong Kong. Plus, a lot of wealthy families and funds (e.g. GS) have started to explore, or have already launched crypto-related investments, making it an area to watch in the coming months from a general market perspective, but also for real estate owners and landlords. 

Investment market driven by sentiment as fundamentals remain flat

Hong Kong real estate investment activities have heated up in August. There have been major transactions concluded for industrial assets with this sector demonstrating the most robust fundamentals in Q2. 

In the past month, we have seen major industrial transactions total HK$4 billion, all of which were acquired by seasoned industrial players. For example, a state-owned logistics company acquired the East Asia Industrial Building for HK$2.24 billion, representing a unit rate of HK$4,802 per sq. ft. A Chinese enterprise bought the Mineron Centre for HK$695 million, representing a unit rate of HK$4,550 per sq. ft., and Hecny Group, a transportation/logistics company, acquired 1 Tai Yip Street in Kwun Tong for HK$628 million, representing a unit rate of HK$9,986 per sq. ft. 

Further to the above, AEW Capital Partners acquired 50% equity interest in Minico Building at 18 Lee Chung Street from Hanison Construction for HK$305 million, representing a full acquisition value for the building for HK$610 million, or HK$6,337 per sq. ft. It was also reported that Goodman acquired 51% undivided shares of Hou Feng Industrial Building for a consideration of circa HK$200 million, which equates to around HK$2,000 per sq. ft.

Following the momentum from Q2 2021, we have seen an investment bull market develop due to positive sentiment as the fundamentals remain relatively flat.

To #SeeWhatCouldBe and maximise the potential of your property, contact our experts James Lai and Russell Lam, today.


相關專家

林 嘯東

董事

Capital Markets & Investment Services

香港

Russell 在投資物業市場工作約10年, 主力處理香港的大手投資物業買賣, 前身亦具香港政府 地政處 經驗. 他處理過的投資物業買賣包括酒店,  貨倉, 住宅地盤, 商業裙樓以及全幢及散層寫字樓等等

在專業經驗方面, Russell 對經濟及金融 亦具有深入的認識. Russell 具財務及金融方面的專業資格, Russell 是一位 特許金融分析師及金融風險管理師

Russell 是特许金融分析师学院會員, 香港測量師學會 (產業測量組別) 會員,  香港註冊測量師 (產業測量), 全球風險專業管理協會會員, 以及一名持牌的香港地產 (個人) 代理. 

在工作以外, Russell 也熱愛高爾夫球運動

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