Buying sentiment brightens for office market in Hong Kong
End users and investors are on the lookout to buy amid strong demand
Buying sentiment in the office property market is expected to see continued improvement, with interest rates now expected to increase gradually rather than sharply, giving encouragement to investors and especially end users on the lookout for opportunities.
Property consultants say the urge to buy is also being driven by a lack of large, contiguous space. That pushes large occupiers, who have existing footprints in the city and are looking to consolidate their operations, into the sales market as an alternative corporate real estate strategy.
"There will be some strong owner-occupier deals in next 12 to 18 months," said John Davis, an executive director of CBRE's investment properties division, adding that price tags would top HK$1 billion.
Buying momentum has continued to build up after Citigroup acquired the East Tower of One Bay East in Kwun Tong for HK$5.42 billion in June. Last month, two en bloc office sales, with a total consideration of HK$2.7 billion, were recorded in Central and Wan Chai, according to Knight Frank.
Meanwhile, an office tower at 41 Heung Yip Road, Wong Chuk Hang, covering 320,000 sq ft was reportedly sold for HK$3.2 billion to a local investor, rumoured to be Angela Leong On-kei, casino mogul Stanley Ho Hung-sun's fourth wife.
The investment market was expected to be more active in the second half of the year than in the first half, Davis said. Apart from end users, local and international investors had been more active recently than at the beginning of the year.