Hong Kong investment volume surges 168% to USD3.3b in Q2

Institutional investors accounted for 71% of all commercial transaction volumes in the quarter.

Overall investment sentiment has improved as we see solid economic recovery and the tapering of COVID cases. According to Colliers, this renewed confidence has led to the growth in the total investment transaction volume, which reached HK$25.5 billion (US$3.3 billion) in Q2 2021, up 168% QOQ and 190% YOY.

The industrial sector was the first area to rebound and has been subject to high demand from investors, but limited quality supply has led certain investment capital flow to other sectors like office and retail in Q2, with QOQ transactions growing by 278% and 276% respectively from a low base.

“One of the biggest turning points has been the return of institutional investors. They picked up the pace in deploying capital, accounting for 71% and 65% of the Q2 2021 and YTD 2021 commercial transaction volume, respectively. The strategic drivers behind the activity saw funds eyeing defensive or stable income streams with strata-titled office in the CBD, neighbourhood malls, and highly lucrative cold storage assets being of interest,” said Thomas Chak, Executive Director of Capital Markets & Investment Services.

“Whilst we forecast the price level for most commercial sectors to bottom out in 2021, the next few months should provide a window of opportunity for investors to hunt for these assets before prices begin to rebound from 2022 onwards,” added Chak.