Hong Kong’s commercial, industrial property market could rebound to pre-pandemic levels on China capital influx, economic recovery

Investments could rebound by as much as 60 per cent to US$12.6 billion this year after hitting a 17-year low in 2020, says Ricacorp (CIR)

Colliers expects mainland players to step up acquisitions, aided by China’s economic recovery and a stronger yuan

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Transactions in Hong Kong’s commercial and industrial property sector are expected to rebound this year. Photo: Sam Tsang

Published: 10:00am, 27 Jan 2021Updated: 3:15pm, 27 Jan 2021

Activity in Hong Kong’s commercial and industrial property market is likely to return to pre-pandemic levels this year amid hopes of an economic recovery aided by Covid-19 vaccinations and mainland investors looking to deploy capital, say market observers.

Investment volume could rebound by as much as 60 per cent to HK$98 billion (US$12.6 billion) this year after they fell 40 per cent year on year to a 17-year low of HK$62.56 billion in 2020, according to a forecast by Ricacorp (CIR) Properties. The volume in 2019 stood at HK$103.84 billion.

The number of transactions, meanwhile, could jump 51 per cent to 5,800, the highest volume since 2018, it added. Transactions slid 17 per cent year on year to a record low of 3,833 in 2020.

“The industrial and commercial property market will bottom out,” said Roy Wong, director at Ricacorp (CIR). “Whether it is industrial, commercial or retail, there will be a full recovery. [The market] has crossed the darkness before dawn.”

Retail property will see the biggest jump in transactions this year. Photo: Bloomberg

Commercial property investors retreated to the sidelines as the coronavirus outbreak took a toll on the city, sending the economy into its worst recession. The government estimated the economy will contract by 6.1 per cent in 2020, the most on record. Financial Secretary Paul Chan Mo-po, however, said earlier this month that the economy will grow this year and could be boosted further if the pandemic is contained.

Ricacorp (CIR)’s Wong echoed the sentiment, saying that the market is anticipating that the vaccination programme could bring the pandemic under control. The abolition of “double stamp duty” on non-residential property last year could also boost investor appetite, aid transactions, he said.