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Market Report, "Hong Kong Real Estate Report Q4 2013", Published

New Business research report from Business Monitor International is now available from Fast Market Research

 

Boston, MA -- (SBWIRE) -- 10/22/2013 -- The Hong Kong Real Estate report examines the commercial office, retail, industrial and construction segments throughout the country in the context of a cautiously expanding market with significant risks. The report covers rental market performance in terms of rates and yields over the past 24 months and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of a projected contraction in the property market.

The real estate market in Hong Kong is characterized by consistent demand stemming from its financial and retail reputation as well as notable structural challenges as its integration with China continues. Significant increases in middle-income Chinese tourists has boosted both real estate and industrial investment opportunities, as international brands and modernized logistics facilities compete for space on all levels. The situation in the office market is somewhat different as rents in the CBD continue to decline; a trend which began in 2011 and may conclude in the near future as the market is likely to bottom-out.

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Though retail and industrial rents have been boosted by increased consumption from the mainland, long term questions remain as to the pattern of Chinese demand as well as Hong Kong's own economic slowdown. GDP forecasts for 2013 have been revised by most firms to just 2.5%, while the Hang Seng stock index is precariously balanced on news of a possible end to U.S. quantitative easing. Increased government efforts to control price levels, property restrictions and gradually rising interest rates could precipitate a market price correction in 2014. Nevertheless, the Hong Kong economy remains both vibrant and resilient, with its international reputation leading many firms including CBRE to project a return of demand to the office market in the long term as the economy stabilizes.

Key Points

- Demand and consumption patterns in Mainland China as well as U.S. interest rate decisions will be the most significant external risks to Hong Kong's commercial real estate sector through 2013 and into 2014. At present, the government is struggling to manage its relationship with CCP Beijing and a population increasingly resistant to further economic integration with the mainland. Over 70% of all tourists in H113 originated from Mainland China, a revenue stream which would have profound effects on the market should it be reduced or restricted. With regard to the United States, the present currency peg directly links US monetary policy decisions with Hong Kong's own market, making any increase in interest rates even more significant.

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