Investment in Hong Kong non-residential property set to double to almost US$13 billion this year, Cushman says

Name: SCMP
Telephone: +852-2680-8888

The number of non-residential sales worth more than HK$100 million each is expected to reach about 200, following just 79 deals worth HK$48.8 billion last year

Abundant capital to chase a diminishing pool of stock, and prices are likely to increase further over the next three to six months, Savills executive says

Reading Time:2 minutes

Why you can trust SCMP

The HK$10.5 billion sale of Kowloonbay International Trade and Exhibition Centre in June is among the biggest recent transactions. Photo: May Tse

Lam Ka-sing

Published: 7:30am, 16 Jul 2021

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.