Hong Kong protests weigh heavily on retail property transactions as volumes sink to an all-time low last year
- Transaction volumes for industrial, office and retail properties plummeted nearly 50 per cent last year to the lowest level since data collection started in 1996
- Ricacorp expects market to bounce back, with transaction volumes rising to 7,000 this year from 4,636 deals in 2019
Hong Kong’s commercial and industrial property transaction volumes fell to the lowest level last year since record-keeping started in 1996, sinking nearly 50 per cent year on year, as investor sentiment took a beating since the anti-government protests started last June.
Transaction volumes of industrial units, offices and shops plummeted to 4,636, from 9,217 in 2018, while turnover tumbled 35 per cent to HK$103.8 billion (US$13.3 billion), from HK$160.3 billion the previous year, according to data from property agency Ricacorp on Monday.
The previous all-time low for volumes was 4,999 in 1999.
“On average, some retail chains have said they would scale down a fifth of their stores,” said Dennis Cheng, senior sales director at Ricacorp. “This is only a [temporary] strategy. As consumption activity gradually picks up at the same time as shop rents drop, businesses would adjust to this.”
Roy Wong, another Ricacorp director, said that although Hong Kong’s economy was still reeling from the aftermath of the protests, the market can bounce back this year as the social unrest gradually eases and businesses regain confidence after the signing of the US-China trade deal.
Ricacorp expects office, industrial and retail property transaction volumes could hit 7,000 this year valued at HK$131 billion.