The fundamentals remain positive for the property investment market despite the latest turmoil in the stock market, with investors especially keen on buying office and luxury residential units, consultant Savills said.
Managing director for Savills’ (Hong Kong) Raymond Lee Wai-man estimates transactions for the investment market in the private sector may hit HK$70 billion this year, up 8.86 percent from about HK$64.3 billion last year.
Senior director for investment Peter Yuen Chi-kwong pointed to favorable factors such as yuan appreciation, the reappearance of negative interest rates, continued capital inflow from overseas funds and attractiveness of returns.
As for interest rates, he said: “We can’t see interest rates increasing.”
Savills recently conducted the sale of Crocodile House and Crocodile House 2 in Central – indirectly owned by toy magnate Francis Choi Chi-ming – which was sold to an overseas fund for HK$1.07 billion. Savills also conducted the HK$1 billion sale of The Hacienda residential estate in Repulse Bay, also indirectly held by Choi, to Cheung Kong (Holdings) (0001).
So far this year, Savills accounted for HK$4.5 billion in investment deals out of the HK$7.5 billion market total.
Deputy senior director for investment Sam Mock Wai-ho said the HK$7.5 billion figure was double the figure for the same period last year, after stripping out the effect of the HK$6.2 billion sale of a 50 percent stake in Festival Walk mall in Kowloon Tong by CITIC Pacific (0267) to its joint-venture partner, Swire Pacific.
Still, some uncertainty remains, with Yuen pointing to the volatility in the equity market and the large supply of office space in 2008 and 2009 in areas such as Quarry Bay and Kowloon Bay.
Source: The Standard