2022-06-27-莱坊-Hong_Kong_Monthly_June_2022_4页_324kb

Office Market Analysis Summary

• Prime Locations: Signals of bottoming out for prime areas, with Hong Kong Island expected to rebound starting from mid-2022, following stabilization in pandemic conditions.
• Leasing Activity: Increased leasing activity in Hong Kong Island, driven by improving economic sentiment and tenant demand for Grade A office spaces at affordable upgrades. Top-tier buildings are particularly favored.
• Rental Trends: Rents for Hong Kong Island Grade A offices expected to rebound by 5-10% in H1 2022, while secondary areas like North Point and Wong Chuk Hang face higher vacancy due to decentralization pressure.
• Co-working Spaces: Gaining popularity as companies shift to flexible work models, offering opportunities for tenants to compare relocation options.
• Kowloon Market: Expected to see rent increases of 0-1% in 2022, driven by demand from quality space seekers, primarily due to "musical chair" office movements.

Residential Market Analysis Summary

• Primary Sales: Strong rebound in the primary residential market, with residential transactions reaching a near-record monthly high, boosted by government consumption vouchers and high demand despite economic uncertainty.
• Luxury Segment: Transactions worth over HK$200 million recorded, though overall sentiment is cautious amid economic concerns. Price hikes of 3-5% are projected for mass residential, while luxury residential prices are expected to increase by 0-3% in 2022.
• Leasing Market: Core drivers remain local demand, supported by attractive purchase prices and primary market activity. Areas near Hong Kong University showed significant leasing demand from students.
• Supply and Sales: High demand existed even amid border restrictions, with transactions of large luxury homes, oversubscription in new launches, and steady sales in emerging areas like Pak Shek Kok.

Retail Market Analysis Summary

• Consumption Recovery: Retail sales continued to improve following stabilization of the pandemic, aided by government stimulus measures like consumption vouchers.
• Sales Growth: Strong performance in categories like electrical goods and consumer durables, while segments reliant on tourists faced severe challenges.
• Rental Adjustments: Retail landlords are offering lower rental incentives to attract tenants, reflecting weak sales recovery.
• F&B Expansion: Growth in food and beverage retail is a key strategy for landlords and tenants to spur foot traffic and counter low sales, with significant vacancy pressures persisting in non-core retail spaces.

General Observations

• Market Uncertainty: Economic uncertainty and volatile interest rates contribute to cautious retail investment.
• Office & Real Estate Strategy: Recalibration of real estate plans is expected as companies optimize their workspace needs, including the rise in co-working adoption.
• Retail Transformation: Retailers are struggling to adapt to the new environment, with F&B and luxury goods being key areas of focus for recovery.