Hong Kong’s commercial, industrial property market could return to pre-pandemic levels in 2021

Colliers predicts Chinese investors to increase acquisitions with the stronger yuan and China’s economic recovery

Top aerial view of Hong Kong with office skyscrapers and business centre. GaudiLab/Shutterstock

Market observers say that business in Hong Kong’s commercial and industrial property market is anticipated to return to pre-pandemic levels, as COVID-19 vaccinations and capital influx from mainland investors aid economic recovery, reported South China Morning Post.  

According to Ricacorp (CIR) Properties, investments could spring back up to 60 percent to HKD98 billion (USD12.6 billion), after a 40 percent year on year fall to HKD62.56 billion in 2020, a 17-year low.  

Transactions, which dropped by 17 percent year on year in 2020 to 3,833, could rebound by 51 percent to 5,800, which would be the highest volume since 2018.  

Roy Wong, director at Ricacorp (CIR) said, “the industrial and commercial property market will bottom out. Whether it is industrial, commercial or retail, there will be a full recovery. [The market] has crossed the darkness before dawn.”  

Wong added that the economy could be boosted further this year with the vaccination programme that would contain the pandemic, including the scrapping of the “double stamp duty” on non-residential property last year.  

The number of transactions of industrial and commercial property in the second half of 2020 saw a 70 percent increase to 2,415 after the abolition of the double stamp duty.  

Retail property will experience the biggest leap in transactions, predicted at 82 percent to approximately HKD38 billion (USD4.9 billion).  

On the account of China’s economic recovery and a stronger yuan, Colliers International believes mainland players to increase property acquisitions, making Hong Kong-priced properties to become more competitive.  

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“When the border opens, it will have an impact on the market. Some investors have already started to become active,” mentioned Stanley Wong, senior executive director of capital markets and investment services at Colliers.  

Simultaneously, CBRE anticipates investors to target assets of fast-growing business sectors such as food and beverage, technology, telecoms, elderly care, pharmaceuticals, and education.  

Reeves Yan, executive director and head of capital markets at CBRE, said that resources like cold storage, data centres, and commercial podiums that can assist these industries will be of interest this year