Investors stayed cautious towards real estate amidst economic headwinds

Lower HIBOR provided limited support but is expected to improve.

Despite the one-month HIBOR decreasing sharply, it failed to boost considerable investment demand in the commercial property market in Q2 2025, according to CBRE’s report.

Total investment volume increased 45% QoQ to $8.7b in Q2 2025 and a total of $14.7b in H1 2025; however, it only occupies 34% of the full-year total for 2024.

Only 16 deals were recorded, the lowest since Q4 2008, with half deals involving financially stressed assets, and sellers seem to be struggling to fulfil loan covenants.

Notable transactions in Q2 2025 included the Hong Kong Stock Exchange’s purchase in Exchange Square from Hongkong Land for a total of $6.3b for self-use, the deal accounted for 73% of the quarter’s total investment value.

CBRE highlights a cautiously optimistic outlook in their report as the market shows early signs of stabilisation.