The most traded city in the Hong Kong region.
Investment volumes in Asia Pacific reached a record-breaking US$81 billion in the first half of 2018, up 30% year-on-year, according to global real estate consultancy JLL. With transaction volumes of US$14.6 billion, Hong Kong led the way as the region's most active metropolis and one of the top three most liquid markets worldwide. The sale of The Center in Central for a record-breaking US$5.1 million set a new global record for the most expensive real estate transaction ever.
"Despite global political and economic instability, Asia Pacific's property markets continue to perform strongly," says Stuart Crow, JLL's Head of Asia Pacific Capital Markets. "As transaction volume growth in this region is supported by a prolonged cyclical recovery in developed economies such as Hong Kong, Australia, and Japan, the pace of deal making in Asia Pacific has surpassed that of Europe and the United States." for sale in qatar
In the first half of 2018, transaction volumes in Hong Kong increased to US$14.6 billion, up from US$5.8 billion in the same period last year. Following the sale of the 73-story office tower The Center for US$5.1 billion, the city not only became the region's most active metropolis, but also surged to third on the list of the world's most liquid markets, behind London (1st) and New York (2nd). It was not only the year's largest single-asset deal, but also the world's most costly real estate transaction.
"Due to a combination of limited vacancy rates, strong occupier demand, and a dearth of new supply, prices in Hong Kong's Central office market have risen. These factors, together with an influx of Chinese occupiers and investors, have hastened the rise in real estate prices "JLL Hong Kong's Managing Director and Head of Capital Markets, Joseph Tsang, agrees.
"Investor appetite remains strong despite rising prices. Mainland purchasers spent an average of US$2.1 billion per year for offices in Hong Kong between 2015 and 2017. Given the US$2 billion in office acquisitions already completed this year, it appears that the sum will be met, if not exceeded "Mr. Tsang argues.
Diversifications from global funds are snapped up by Asian investors.
In the first half of 2018, Asian investors were the most active net buyers of commercial real estate. Between January and June, the group alone purchased 20% of the office, hotel, and retail assets sold by global funds, which were the largest net sellers of commercial real estate - worth a total of US$31.5 billion.
Investors from Hong Kong, Singapore, and South Korea stepped in to supply liquidity as outbound investment from China stalled, highlighting the region's buyer pool's depth.
"While many of these investors previously preferred the United States," Mr. Crow continues, "pricing challenges in core markets and growing hedging costs are leading many Asian groups to examine investments in Europe instead." "This is especially true for South Korean investors, who are more likely than other investors to hedge. At the half-year mark in 2018, South Korean purchases in Europe were more than double those in the United States."
The office sector accounted for more than half of all transaction volumes in the region, with retail accounting for 20%. Industrial and logistics transactions, which accounted for 13% of all transactions, increased by 27% year over year as it continues to be favored by both foreign and domestic investors.
"Investors are increasing their exposure to real estate in Asia, with a growing number of institutions increasing their holdings due to the sector's defensive attributes, consistent income stream, and relative performance to other asset classes. A growing need for scale is being fueled by changing demographic and technological trends, particularly in the logistics and alternative energy sectors "Mr. Crow adds.