Investment returns in Hong Kong offices plunge to thirty year low

It’s the only major market where returns are lower than a 10-year US Treasury Bond.

Bloomberg reports that the rental yields on Hong Kong’s office properties are amongst the world’s worst which leaves it trailing behind the returns offered by the ultra-safe 10-year US Treasury Bond.

This comes as a slew of Chinese investors with an eye for trophy assets eagerly snap up Central offices like there is no tomorrow without taking the math into consideration, pushing yields to its lowest point in over 30 years.

Also read: Central is the world's priciest prime office market for the third consecutive year

In fact, CBRE notes that amongst the 13 office building purchases valued at over $5b since 2015 in Hong Kong, seven of the buyers were from China .

Also read: Half year office net absorption rate of 1.5m sqft smashes 2017 full-year record

“It shows investors don’t really do this math,” said David Ji, head of research and consultancy for Greater China at property firm Knight Frank LLP.

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