Prices of industrial and retail space soar
As buyers look to hedge against inflation and cash depreciation, prices for HK industrial and retail property rise at an unprecedented rate
Investors turned to aggressively buying Hong Kong industrial and retail properties as a hedge against inflation and cash depreciation after the launch of a third round of liquidity-boosting measures by the US Federal Reserve.
Data from listed real estate agency Midland IC&I show transactions in industrial, office and retail properties increased by 24.7 per cent, 16.8 per cent, and 19.2 per cent respectively from September 14 - the day the additional quantitative easing, or QE3, measures were announced - to October 13, compared with the previous 29-day period.
However, sales of office properties over the same period dropped 27.3 per cent to HK$2.81 billion, with most of deals being for small lump-sum properties.
The surge in demand for industrial properties had driven prices up some 20 per cent since the middle of September, according to Alvan Chan, a director of industrial properties at the firm.
"Almost half the transactions every day are record-breaking in terms of prices per square foot. I have worked in the industry for 20 years and have never seen this happen before," he said.
Among all non-residential properties, the industrial market recorded the sharpest growth in sales, said Pierre Wong Tsz-wa, Midland IC&I deputy chairman.
Data from Centaline Property Agency also shows strong demand for industrial properties, tracking a rise in sales to HK$3.64 billion over the first three quarters of this year.