First-quarter sales slow as investors opt for equities
First-quarter sales transactions in the office property market are expected to have dropped modestly from the previous quarter as investors shifted their focus to the stock market, according to property consultants.
Watson Chan, research director of Chesterton Petty, said some investors had changed their portfolios from physical properties to stocks as the stock market surged in the past few months.
They were attracted by the quicker and high returns, he said.
Mr Chan said sales volume in the first two months was a bit slow and he expected the trend to continue.
Sales activities in the first quarter would be lower than in the fourth quarter of 1999, he said. Detailed figures would be announced soon.
Surveyors said office-market sales at present relied on end-users who were interested in quality properties at bargain prices.
End-users might target properties foreclosed by banks, which were usually sold at below market prices.
Transactions of banks' foreclosed properties improved last month, Centaline Property Agency said.
In February, banks sold 19 foreclosed properties, fetching $166 million. This compares with 15 deals in January involving $136 million.
Foreclosed properties sold last month fetched more than $3 million each.
Properties valued at $2 million each attracted less buying interest last month, indicating interest in upmarket office units, the agency said.
Mr Chan said even though the office sales market had slowed, the leasing sector had improved with effective rentals rising significantly.
In the first two months, effective rentals of grade-A properties in Central rose about 20 per cent from the previous quarter.
Rentals in other areas such as Wan Chai, Causeway Bay and Island South rose from 12 per cent to 17 per cent.
Mr Chan said new supply in Central was limited after two new office buildings - Cheung Kong Center and International Finance Centre - were almost taken up.