Investment volume for 2024 to likely match $40b in 2023: CBRE

Local buyers like family offices and high-net-worth individuals are the key purchasers. 

The full-year investment volume is expected to be on par with 2023’s $40b, but achieving this figure depends on the completion of a few large deals currently under negotiation, according to CBRE’s Asia Pacific Investment Trends Q3 2024.

The report noted that in Hong Kong SAR (HKSAR), investment volume saw a quarter-on-quarter (QoQ) rise in Q3 2024, albeit off a low base, with local buyers like family offices and high-net-worth individuals being the key purchasers but tending to focus on smaller lump sum acquisitions. 

In most cases, mainland Chinese buyers are targeting smaller ticket sizes of around $155.4m (US$20m) to $233.1m (US$30m) rather than the previous $777.2m (US$100m) to $3.9b (US$500m) price range. 

Moreover, the report also said that the central government’s latest stimulus package to support the real estate market is unlikely to trickle down to Hong Kong SAR as it remains challenging to transfer money out of the mainland.

Of the big transactions completed, the bulk have been direct deals involving developers and real estate companies.

The asset class that is outperforming from an investor perspective is Purpose Built Student Accommodation (PBSA). 

Oversupply could become an issue in a few years as investors continue to seek hotels and residential buildings for conversion, the report read. 

It was also further noted that the recent relaxation of LTVs for commercial real estate acquisitions has failed to boost investment activity due to banks' cautious attitude towards lending. Landlords now have less incentive to divest if refinancing becomes an issue. 

Whilst levels of distress remain high, acquisition opportunities for these assets remain limited overall and are mainly confined to the office sector.

($1 = US$0.13)