Investment seen rising up to 10% in 2026

Living assets drive rebound in deals.

Investment volume is forecast to grow 5%-10% YoY in 2026, with activity tracking towards the upper end of that range as improving sentiment lifts activity in living assets and residential development sites.

CBRE said the market’s recovery was being led by student accommodation conversions and renewed confidence in residential development, whilst falling HIBOR had yet to translate into a broad revival in property lending as banks continue to work through distressed loan books.

Student housing conversions have been the clearest source of momentum, with about 20 hotel and residential blocks acquired for conversion in FY2025 and a further seven transacted in early 2026.

CBRE said that pace is likely to slow as the supply of suitably priced conversion candidates dwindles, pushing investors to look beyond student apartments to co-living and potentially build-to-rent strategies.

Office deals are also being supported by owner-occupiers, with local corporates and established Hong Kong companies buying strata floors at what they see as cycle-bottom pricing.

Activity in residential development sites is expected to remain brisk as confidence spreads more broadly across the market.

CBRE said larger hotels that cannot be converted to student accommodation are still drawing interest, although a bid-ask spread remains.

It added that leveraged transactions are likely to remain scarce and loan-to-value ratios compressed until major lenders clear distressed exposures and regain their appetite for real estate lending.