Commercial property deals soar to HK$43.1b in first half

Thursday, July 15, 2021

The commercial real estate investment market has recorded 89 deals in the first half of this year, worth HK$43.1 billion, an increase of 97 percent year-on-year, said Cushman and Wakefield.

The real estate services firm said that as the economy recovers, local and institutional investors have sought investment opportunities.

Half-year transaction volume has surpassed that of the annual number in 2020. The firm expects full-year deal count to reach 200, the most since 2018.

Meanwhile, the industrial sector is newly under the spotlight due to relatively low unit price and favorable policies. In particular, industrial properties emerged as the most investible asset class in the first half, accounting for 30 percent of total consideration, a significant increase compared with the average of 14 percent in the last decade.

The hotel sector is also expected to show potential for capital value growth in the long run.

Tom Ko, Cushman and Wakefield’s executive director and Hong Kong head of capital markets said: "The hospitality industry has been facing many challenges during the pandemic and hence associated investment activity has frozen at present. Yet, the hotel industry has been proactively reacting to the situation by launching monthly rental plans, in an attempt to benefit from the red-hot residential market."

Investors have been looking at the long-term investment value of hotel properties, especially high-quality assets at discounts. Ko anticipates that hotel transactions will pick up in the second half.