Mainland Chinese insurers, banks waiting to move into Hong Kong office sector
Mainland finance sector eyes premium office space but deals on hold due to transaction costs
Mainland insurers and banks currently looking for office space for their own use or investment purposes are expected to form a new buying force in Hong Kong's weak investment property market, according to property consultants.
"Mainland enterprises such as insurers and banks have been actively looking for properties in Hong Kong that are prestigious and in prominent locations, for example en-bloc office buildings in the central business district," said Tom Ko, director of investment and advisory services in Hong Kong for property consultancy DTZ.
The companies would be interested in buying both for their own use and investment purposes, he added.
Deals had not yet been done, he said, but this was because of a limited choice and high transaction costs.
"But these companies are expected to become a significant force in the end-user demand for investment properties, should the market conditions improve," Ko said.
According to a DTZ report on the city's property investment market, a total of 27 property transactions valued at HK$100 million or above were conducted in the third quarter compared with 42 such deals in the second quarter. The decline was due to successive property cooling measures taken by the government, the report said.