Hong Kong’s real estate deals jump to 24-year high in first half buoyed by upbeat economic sentiment
- Real estate deals amounted to HK$468.71 billion from January to June, the most since HK$483.6 billion in the first half of 1997, Midland Realty data shows
- Secondary housing tops the volume, accounting for nearly 60 per cent of the turnover this year
The overall volume, including homes, commercial and industrial properties and car parking spaces, rose to HK$468.71 billion (US$60.4 billion) in the first six months, the most since HK$483.6 billion in the first half of 1997, according to data compiled by Midland Realty. It represented a 74.2 per cent jump from the same period last year, when the Covid-19 pandemic coupled with the recession dampened investor sentiment.
Secondary housing topped the list, accounting for HK$280.06 billion or nearly 60 per cent of the turnover.
“Even under the haze of the pandemic, the property market has rebounded, with the number and value of transactions rising, of which the second-hand housing market has become the main driving force,” said Buggle Lau Kai-fai, chief analyst at Midland Realty.
Offices saw the fastest growth in transactions, rising nearly fivefold to HK$22.58 billion in the first half compared to HK$4.52 billion a year earlier. One of the biggest transactions was the HK$10.5 billion sale of Kowloon Bay International Trade and Exhibition Centre in June, data from Centaline Commercial showed.
The commercial and industrial property segment saw first-half deals increase 136 per cent to 3,623, the most since the second half of 2018 before the outbreaks of social unrest and coronavirus pandemic saw investors retreat to the sidelines, according to Centaline. Transactions in the second half are expected to rise by another 25 per cent from the first half to 4,500, it estimated.
“The bottom in the industrial and commercial property market has ended, and the market is slowly entering an upward trend,” Poon said.
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Separately, a real estate unit of asset manager Schroders Capital and real estate investment firm BentallGreenOak said that they have acquired an industrial property and car parking spaces at Cable TV Tower and One Midtown from Wharf Development.
Located in Tsuen Wan, the premises comprise about 568,200 sq ft of industrial space and 122 car parking spaces.
The companies paid HK$2.6 billion for the assets, according to sources. A Schroders spokesman, however, declined to confirm the price.
“In anticipation of a gradual recovery in trade and economic activities, this deal represents a strategic investment and a good opportunity to capitalise on Hong Kong’s international importance as a trading and logistics centre,” said Andrew Moore, head of Schroders Capital Real Estate Asia Pacific.