Hong Kong drops to the third spot as the largest commercial property market in 2019
Concerns over the US-China trade war, the months-long protests, and the Wuhan pandemic to blame for the decline
Data and analytics firm Real Capital Analytics revealed that Tokyo and Seoul have surpassed Hong Kong as the biggest commercial real estate market in 2019, reported South China Morning Post.
Back in 2018, Hong Kong took the lead, while Tokyo and Seoul came in the second and third spots.
Managing director of capital market in Asia at Colliers International Terence Tang said: “After experiencing years of strong rental and capital value growth, Hong Kong’s property market is entering a downward phase, while the local economy faces pressure from both external and internal volatility and tensions.”
Since June, Hong Kong has been facing the most catastrophic political impasse in decades, which have distressed the retail and tourism industries. The US-China trade war has also affected the trade and investment activity, as concerns grew over its long-term effect.
More: Escalation of Wuhan virus threatens more retail sales loss in Hong Kong amid protests
However, analysts believe that Hong Kong will recover in the next 12 months as reasonable prices return, encouraging a buyers’ market and prompting investors to scour for massive discounts and take advantage of opportunities.
“Affluent investors and institutional funds are also eyeing opportunities presented by distressed sales of assets,” added Tang.
Property consultancy CBRE said that the recent Wuhan pandemic has also disrupted the business activity in Hong Kong, leading to “short-term implications on investment volume.”
They also revealed that Tokyo has always been the biggest commercial property market in the Asia Pacific region, excluding the one-off large commercial property deal in Hong Kong in 2018.
Head of occupier research in Asia-Pacific at CBRE Ada Choi said: “Funds across the region have raised capital in the past two years, which they are looking for somewhere to deploy. Japan is an attractive destination because of the depth and the breadth of its market, as well as low-interest costs.”
On the other hand, “investment momentum in Seoul has been building for some time,” said Real Capital. The property market in Seoul has “more than tripled in the period.”
Recommended
Philippine real estate sees growth in regional markets despite challenges in Metro Manila
Amid pressures, developers and investors are capitalising on a range of opportunities to drive growth in the nation's real estate sector
Bali leads the charge in Indonesia’s rental boom while other regions struggle to keep pace
The rental market is soaring in Bali due to its rich cultural heritage and island charm, while other regions of Indonesia are experiencing less success
Rental markets surge in Asia as digital nomads find new opportunities with visa reforms
As countries in Asia roll out customised visa programmes, rental markets are thriving with the influx of remote workers
China’s hospitality market thrives as developers sell off assets to spark recovery
China’s indebted developers are divesting hospitality assets to generate growth and enhance the outlook of the country’s real estate market