Real estate investment volumes up by almost 50% in Q1

However, overall investor sentiment remained subdued as interest rates remained high.

Investment volumes in Hong Kong’s real estate market reached $1.4b (US$1.1b) in the first quarter of 2025 (Q1 2025), marking a 49% year-on-year (YoY) increase from a notably low base, according to JLL.

Overall investor sentiment also remained subdued as interest rates remained high. Transaction volumes were supported by sales of distressed assets.

The report also noted that access to debt financing remains difficult across most real estate segments in Hong Kong, with the notable exception of data centres and high-quality industrial properties.

A substantial amount of real estate debt—both secured and unsecured—is due to mature over the next two years.

Since many second- and third-tier commercial property groups own office and other assets outside Hong Kong, special situations refinancings are emerging as potential solutions to buy time before value adjustments and disposals.

Moreover, in APAC, over $391b (US$300b) has been spent by private wealth investors across multiple geographies, with Australia, Japan, and Hong Kong seeing the majority of the capital.

However, Hong Kong's office sector continues to lag, with institutional investors maintaining a cautious approach. Office acquisitions were mostly made by private wealth investors or end-users taking advantage of the corrected asset prices.

($1 = US$0.77)