Big-ticket investment in Hong Kong property is set to more than double this year and rise up to HK$100 billion (US$12.9 billion), the highest since 2018, as local investors and international funds make a beeline for non-residential properties. The number of non-residential sales worth more than HK$100 million each is expected to reach about 200, at a volume of HK$90 billion to HK$100 billion, according to consultancy Cushman and Wakefield. Last year, just 79 deals generated HK$48.8 billion. “The total consideration for this year is likely to reach half of the peak in 2017 or 2018,” said Keith Chan, Cushman’s director and head of research. As the local coronavirus outbreak is brought under control and Hong Kong’s economy recovers, local and institutional investors with abundant capital have become active and are looking for investment opportunities. The city’s commercial real estate investment market has already recorded 89 deals in the first half of this year, generating HK$43.1 billion, an increase of 97 per cent year on year. This number is, however, dwarfed by a peak in 2017, when the economy was booming and the city reported 256 deals worth HK$176.6 billion. One of the biggest transactions recently was the HK$10.5 billion sale of Kowloonbay International Trade and Exhibition Centre in June. This helped the office sector to account for 40 per cent of the total volume in the first half. The retail sector recorded the highest number of deals as local investors were in favour of smaller assets, but a greater chance for long-term growth, according to Cushman. While local investors have dominated the market due to travel restrictions, institutional investors have also started to eye industrial buildings and development sites. Industrial properties accounted for 30 per cent of total consideration – a significant increase compared to the average of 14 per cent in the past decade – mainly due to their relatively low unit prices, favourable policies by the government and the possibility of use conversions. Abundant capital “will chase a diminishing pool of stock, no matter for investment or redevelopment, and prices are therefore likely to increase further, in the order of 3 per cent to 5 per cent over the next three to six months,” said James Siu, deputy managing director and head of Kowloon at Savills. This bullish forecast came as Hong Kong’s economy and home prices have climbed this year. An overall index compiled by the city’s Rating and Valuation Department shows that in May this year, a five-month rally in home prices stood just 0.8 per cent shy of a peak in 2019 . The rally came after a brief slump because of the coronavirus outbreak last year and talk of Hongkongers leaving the city following the protests of 2019 and the implementation of a controversial national security law. “While we forecast the price level for most commercial sectors to bottom out in 2021, the next few months should provide a window for investors [to] identify and acquire assets before prices in most commercial sectors rebound from 2022 onwards,” said Rosanna Tang, head of research in Hong Kong and Southern China at Colliers.