Commercial property investment surges 129% to $24.3b in Q2

For the first half, investment volume rose 90% to $36.9b (US$4.7b).

Hong Kong’s commercial real estate investment volume surged 129% year-on-year to $24.3b (US$3.1b) in the second quarter (Q2), on the back of stronger retail and office activity, according to a JLL report.

For the first half, investment volume reached $36.9b (US$4.7b), up 90% from the same period last year.

The strong performance comes as selective investors acquire assets that offer immediate yield stabilisation, with office transactions including properties under receivership such as 299 Queen’s Road Central and One Bedford Place.

“Positive office leasing momentum is expected to revitalise the market, whilst retail price corrections have largely paused, keeping closed deal volumes stable,” the report added.

Meanwhile, Oscar Chan, head of Hong Kong capital markets at JLL, said investment activity remained strong despite macroeconomic and interest-rate uncertainty.

“The market has recorded several notable transactions involving retail podium assets and luxury residential projects, which reflect sustained buying interest and underlying investor confidence in selected asset classes,” Chan said.

Hong Kong’s rebound came as commercial property investment across Asia Pacific rose 38% year on year to $357b (US$45.5b) in Q2.

Regional investment reached $725.7b (US$92.5b) in the first half, up 35% and marking the highest first-half volume on record.

Pamela Ambler, head of investor intelligence for Asia Pacific at JLL, said investors were becoming more selective amidst economic uncertainty.

“Investors are pivoting toward sectors with strong structural demand, such as data centres in Japan and logistics in Australia, or targeting assets that offer immediate yield stabilisation, like Hong Kong’s recovering offices,” Ambler said.

$1 = US$0.13