Since the removal of the double stamp duty on non-residential property deals in November 2020, there has been an uptick of strata-title office transactions in Hong Kong, professional services and investment management firm, Colliers Hong Kong, said in a report.
Stanley Wong, senior executive director, Capital Markets and Investment Services, said the overall investment volume and strata-title office transaction are expected to increase this year, as the market sees more liquidity due to a higher level of investment capital, sustained expectation of low-interest rates, and closer business opportunities with the Greater Bay Area.
Office prices and rents are expected to remain under pressure in the first half and bottom out during mid-year.
Grade A strata-title office prices will undergo a 10 percent year-on-year correction, and rents would drop by another 7 percent on-yera, Colliers Hong Kong predicts.
The firm predicts office rents and prices to rebound in 2022 by 3 percent year-on-years and 4 percent year-on-year, respectively.
Office price will also rebound by around 25 percent between 2022 and 2025.
“This suggests by leveraging the rental and price corrections in 2021, now is the good time to explore opportunities in the strata-title office market,” said Rosanna Tang, head of research, Hong Kong and Greater Bay area.
In the Grade A office market in Hong Kong Island’s central business district, one of its biggest price corrections since the last peak in July 2018 has taken place, Colliers Hong Kong said.
The first expects greater rebound in CBD price among all key submarkets in the office sector from 2022 onwards once the market picks up, because of the limited Grade A office supply in Hong Kong Island’s CBD areas.
“Among the 11 million square feet of new office supply between 2021 and 2025, only around one-third will be on Hong Kong Island, where most space will likely be leased out rather than offering for strata sales. Moreover, the new Grade A office supply resulting from the future Site 3 development together with the Hutchison House and Murray Road Car Park redevelopment, will bring in vibrancy into the CBD areas, which will support the long-term pricing level,” said Thomas Chak, executive director of Capital Markets and Investment Services.
