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Private funds set to boost Hong Kong property investment by 40 per cent as assets cheapen after two-year slump
- Gaw Capital Partners, Phoenix Property Investors and Bridgeway are looking to pick up undervalued assets on the back of economic recovery
- Investment jumped 30 per cent in the first quarter, according to Colliers, with industrial properties very much in demand
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Institutional investors are flocking back to Hong Kong’s property market after a two-year slump, setting the sector up for its biggest annual growth since 2018 as the economy rebounds from its worst recession.
Total investment volume is expected to soar 40 per cent to HK$86 billion (US$11.1 billion) this year, according to consultancy Colliers International. They fell 35.2 per cent year on year to HK$127.7 billion in 2019 and 52 per cent to HK$61.4 billion in 2020. The firm based its forecast on deals worth at least HK$100 million, using data compiled by Real Capital Analytics.
Private funds have become more active since late last year, as they look to pick up assets beaten down by social unrest and the Covid-19 pandemic. The city saw a 30 per cent jump in investments to HK$10.1 billion in the first quarter from a year earlier.
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“We expect to see investment market sentiment recover further with a higher level of transactions, especially compared to 2020’s low base,” said Rosanna Tang, head of research in Hong Kong and the Greater Bay Area at Colliers. Investment appetite remains solid among investors loaded with capital to deploy, she added.
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Hong Kong’s economy is forecast to expand by 4 per cent this year, after shrinking by an unprecedented 6.1 per cent in a pandemic-stricken 2020, Colliers said in an April 15 report. Progress in vaccination programmes and government incentives including stamp duty removal “have also provided some positive spin to the investment market”, it added.
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