Investors abandon HK's office sector in Q122: report

Office has been overtaken by other core sectors in terms of investment volume.

Investors seemed to have abandoned Hong Kong's office sector after it got the lowest investment volume in a single quarter amongst the core sectors in Q1 2022, Real Capital Analytics' Asia Pacific Capital Trends report revealed.

Based on the report, no cross-border deals were seen in the market, adding that overseas players looked to industrial, self-storage, data centre and hotel properties.  Domestic investors, on the other hand, focused on the retail sector.

The industrial sector, as well as hotels acquired for conversion into residential projects, were seen as the biggest contributors to the 21% gain in Hong Kong's commercial real estate activity for the quarter. 

Meanwhile,   Real Capital Analytics’ Head of Real Estate Research-Asia, Benjamin Chow, said the only "silver lining" for the office sector in Q1 was the tapering off of price declines.

"Office yields have stabilized at the 2.7% mark over the past 12 months, with capital values (as measured by the RCA CPPI) flat over the same period," Real Capital Analytics said.