Hong Kong’s REIT market may grow with regulatory reforms: Deloitte

Introducing corporate REIT structures and easing property holding rules could address these challenges, says Deloitte.

Hong Kong’s REIT market, limited to 11 REITs since 2019, may unlock growth through regulatory reforms and tax incentives, according to Deloitte.

In a report, Deloitte noted Hong Kong’s REIT market is hindered by regulatory constraints, such as borrowing caps, strict property development limits, and mandatory holding periods.

These restrictions reduce flexibility for REIT managers and deter new market participants, limiting the sector’s potential.

Introducing corporate REIT structures and easing property holding rules could address these challenges, Deloitte suggested. Such reforms would not only enhance flexibility but also attract institutional investors by aligning Hong Kong’s REIT framework with international standards.

Including REITs in the Stock Connect program and offering tax transparency were also noted as key opportunities to boost liquidity and investor confidence.

These measures would enable Hong Kong’s REIT market to leverage mainland China’s growing capital flows and diversify its investor base.

Despite current limitations, Deloitte emphasized Hong Kong’s strategic advantages, including its position as a gateway to mainland China and its well-established capital markets.

These strengths, paired with regulatory reforms, could position Hong Kong as a leading hub for REITs in the Asia-Pacific region.