Investment market sentiment picks up in Q2

Thanks to some eye-catching deals.

Investment market sentiment in Hong Kong was observed to have improved towards the latter half of the second quarter this year due to the conclusion of some eye-catching deals.

According to a report from CBRE, the most significant among these deals was the purchase of East Tower of One Bay East by Citi for $5.42 billion.

The report also noted that Investment lump sum for commercial assets transacted (excluding sites) $18.4 billion, a 78% increase from Q1 2014, and that the warehouse sector, leveraging on the demand-supply imbalance, continued to post capital value growth, up 3.3% q-o-q, the strongest amongst all commercial property sectors.

Meanwhile, the report said that not much change has been seen in the prime office market.

Here's more from CBRE:

The office leasing market remained broadly slow in Q2 2014 although sustained demand from PRC financial sector firms helped fuel Central with some momentum.

Overall net absorption slowed to 18,750 sq. ft. (NFA), bringing the year-to-date number to 174,000 sq. ft. in the first half of the year. This is far from strong, from a historical perspective, but is in contrast to the negative 130,00 sq. ft. recorded for 1H 2013.

Rental movements mainly within a 1% band with the exception of Tsim Sha Tsui, where pressure from returning space in the heavily-weighted ICC led to a 4% drop in the submarket’s average rents.