Hong Kong’s luxury home rents recover as mainland Chinese executives flush with IPO funds drive leasing deals

Rents for luxury homes in Hong Kong jumped 5 per cent in April and May, after falling as much as 13.5 per cent from a record high in August 2109

All districts on Hong Kong Island saw mild rental increments in the second quarter, with Mid-Levels posting the largest rise at 0.7 per cent

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Hong Kong’s luxury rents are rising again after declining for eight consecutive quarters. Photo: Edmond So

Published: 10:00am, 14 Jul 2021Updated: 3:07pm, 14 Jul 2021

Luxury home rents are back on the rise, ending eight consecutive quarters of decline, as mainland Chinese executives, flush with funds from successful initial public offerings in Hong Kong, drive leasing transactions at the top end of the market, say property agents.

Rents for luxury homes jumped 5 per cent in April and May, after falling as much as 13.5 per cent from a record high in August 2109, according to data from the Rating and Valuation Department.

“Hong Kong Island tenants traditionally come from finance related industries, which are benefiting from the flourishing IPO market,” Aradhana Khemaney, head of residential services at Savills, wrote in the consultancy’s latest report on residential leasing.

Hong Kong’s IPO market has been busy in the first five months of this year, with companies raising a record HK$184 billion from initial public offerings in Hong Kong, a 620 per cent jump over the same period in 2020, Savills said. Kuaishou Technology, the operator of China’s second-biggest short video-sharing app, launched this year’s biggest IPO, mopping up US$6.2 billion in January.

All districts on Hong Kong Island recorded mild rental increments in the second quarter, with Mid-Levels posting the largest rise at 0.7 per cent, followed by Pok Fu Lam and The Peak, Hong Kong’s most prestigious address, at 0.5 per cent, according to Savills.

“The luxury residential leasing sector has stabilised,” said Koh Keng-sing, chief executive and founder of Landscope Christie’s International Real Estate, which focuses on luxury residential sales and leasing in Hong Kong. “Most big-ticket leasing deals recently were done by mainland enterprises rather than multinational corporate tenants.”