Hong Kong retail real estate market still flat, says Savills
Retail sales may be starting to rebound, but there is little movement in the Hong Kong retail real estate market.
Proximity to the border with Mainland China is key to the market, according to the latest retail-investment briefing from Savills Hong Kong real-estate company.
It says the New Territories retail sales market is still hot with areas such as Fanling, Sheung Shui and Yuen Long firmly in investors’ sights.
“The rise in same-day visitors and the popularity of parallel trading are behind the active market,” says the report, which notes the gentle downward trend in retail prices continuing over the third quarter even as sales volumes rose marginally.
Small and medium-sized units valued at between HK$10 million and HK$20 million have been most active, while trades exceeding HK$50 million are still “extremely rare”.
Most deals tend to be the result of local investors recycling capital from one premises to the next, generally chasing better returns, says the report.
Meanwhile, commercial land sales reflect developer confidence, the report citing the sale of a rare commercial site on Peel and Graham Street, to be developed in phases as a project comprising retail, offices and a hotel. A Wing Tai-led consortium won the bid for the site, which has a gross floor area of about 433,000sqft (40,230sqm). The transaction is said to have been HK$11.6 billion (US$1.4 billion), Savills reports.