Savills

Publication

Hong Kong Investment - Oct 2023

Article

Contacts & Related Research

 

Commercial Property Market Faced Ongoing Challenges

  • High cost of funding and worsening debt situations in Mainland China dampen investment sentiment.
  • State-owned enterprises (SOEs) make notable investments in the hospitality sector.
  • Subdued commercial investment market, with only one en-bloc distressed office sale recorded in Q3.
  • Retail sales experience significant YoY growth, but cross-border shopping impacts local market.
  • Investment market influenced by high interest rates and cautious lending policies. However, hotels show potential for recovery, but escalating prices may limit transaction volume in the near future.
  • According to Savills' price forecast for 2024, the Grade A office market is projected to decline by 5%, while prime street shop prices may range from 0 to 5%.

 Notably, interest in the office sector remained limited to end users, while market attention gravitated towards high yielding retail assets. Additionally, the hotel sector continued to attract favor from Mainland capital.

Jack Tong, Savills Research & Consultancy
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