Hong Kong’s property deals rise to two-year high as Chinese buyers, foreign investors snap up shops, offices and parking bays

Purchases soared to a two-year high of HK$17.3 billion (US$2.2 billion) in the eight months through mid-August, according to Midland IC&I’s data

Investors domiciled in mainland China made up HK$8.53 billion, or 49 per cent of the deals, the highest since the street protests of 2019

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Residential and commercial buildings on Hong Kong Island and Kowloon on February 17, 2020. Photo: AFP

Published: 9:30am, 26 Aug 2021Updated: 10:13am, 27 Aug 2021

Non-residential real estate investments into Hong Kong have soared this year, as mainland Chinese and foreign investors snapped up industrial buildings, shops, serviced apartments and car parking bays in the city.

Purchases by foreigners and Chinese investors soared to a two-year high of HK$17.3 billion (US$2.2 billion) in the eight months through mid-August, according to data compiled by Midland IC&I, which tracks non-residential property deals larger than HK$100 million. Investors domiciled in mainland China made up HK$8.53 billion, or 49 per cent of the deals, the highest since the city’s anti-government protests of 2019, the data showed.

“The overall investment market has gradually recovered in Hong Kong, with the pandemic under control,” said Tony Lo Chin-ho, chief executive of Midland’s ICI Property unit. “The number of big-ticket transactions is showing an upward trend.”

The investment boom underpinned the recovery in Hong Kong’s economy, which expanded by 7.5 per cent in the second quarter following a larger-than-expected first-quarter growth of 7.9 per cent. Total non-residential real estate deals, inclusive of local transactions by Hongkongers, jumped to HK$49.1 billion as of mid-August, more than the 12-month total for 2020, according to Midland’s data.

Transactions may slow down in the second half of 2021, as some foreign investors postpone their expansion plans in the city and head for the sidelines, amid concerns about how their businesses would operate under a proposed anti-sanctions law for Hong Kong.

A law enacted in June in mainland China gives Beijing authorities legal grounds to take countermeasures against foreign individuals and entities involved in discriminatory measures that “violate international laws and basic norms.” Enactment of the law in Hong Kong was unexpectedly delayed last week, as a four-day meeting in China’s legislature concluded without saying how the legislation would be adopted in the city.

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