Transaction volumes in commercial, industrial sectors to see better days in 2H14

Partly due to the diminishing DSD impact interest rates.

With regard to prospects for the real estate market in the second half of 2014, it has been observed that with interest rates likely to remain low and the impact of the DSD diminishing, transaction volumes in the commercial and industrial sectors are expected to gradually increase in the second half of 2014.

According to a research report from Savills, further, other prospects for the second half of 2014 involve luxury residential prices.

"As the impact of the DSD starts to wane and interest rates are likely to remain low in the near future, we note more end users purchasing office and industrial properties, while some investors have been lured by the suburban retail story." Simon Smith, Savills Research.

Here's more from Savills:

While we still see some minor declines in luxury residential prices, the rate of decline has slowed and some record deals have been completed, seemingly signalling the end of the current downcycle.

Reviving en-bloc deals in both the commercial and industrial markets may induce further interest from both end users and investors.

The en-bloc segment was in the spotlight once again with Citibank spending HK$5.4 billion on East Tower, One Bay East in Kowloon East, with the West Tower of the same development being sold to Manulife a year ago, reflecting immense interest in the owner occupation of these brand-new en-bloc offices.

Elsewhere, two billion-dollar investment deals were noted, the first being the sale of the Shopping centre portion of Legend Tower in Kwun Tong to an investor for HK$1 billion, the other being Goodman’s purchase of Central Textiles Factory in Tsuen Wan for HK$1 billion, eyeing a long-term redevelopment into a modern logistics facility for lease.