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COMMERCIAL PROPERTY | Staff Reporter, Hong Kong

Investment activity for industrial buildings with revitalisation potential ends in 2016

Along with government scheme expiration.

Investment activity for industrial buildings with revitalisation potential will come to an end with the expiration of the government's scheme in March 2016.

According to a research note from CBRE, while slower retail sales may reduce the appeal of purchasing logistics space, the emergence of other industrial property types such as data centers and self-storage will provide new opportunities for investors.

The report noted that it expects end-users to continue to drive sales demand for industrial property. Capital values and yields will remain stable and follow rental movements in 2016.

Here's more from CBRE:

Further rate hikes in 2016 are expected to be gradual and mild, which will not cause panic sales. However, investors could become more cautious and smaller investors could experience thinner margins from increased borrowing costs.

High-quality assets will remain sought after, particularly in the office sector. Sustained demand will come from Mainland Chinese companies, which will continue to search for trophy assets for self-use.

Weak retail sentiment will continue to inhibit activity in the sector. Higher downside risks mean retail property yield will need to continue to edge up for investors to enter the market.
 

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