CBRE Hong Kong presents key sector specific highlights for Q2 2014. For more information or to arrange interview on the key findings please contact karen.ho@cbre.com.hk / 2820 8108.
Investment Market*
- Investment lump sum for commercial assets transacted (excluding sites) $18.4 billion, a 78% increase from Q1 2014
- Investment market sentiment improved towards the latter half of Q2 2014 when some eye-catching deals were concluded. Most significant being the purchase of East Tower of One Bay East by Citi for $5.42 billion
- The warehouse sector, leveraging on the demand-supply imbalance, continued to post capital value growth, up 3.3% q-o-q, the strongest amongst all commercial property sectors
Prime Office Market*
- The office leasing market remained broadly slow in Q2 2014 although sustained demand from PRC financial sector firms helped fuel Central with some momentum
- Overall net absorption slowed to 18,750 sq. ft. (NFA), bringing the year-to-date number to 174,000 sq. ft. in the first half of the year. This is far from strong, from a historical perspective, but is in contrast to the negative 130,00 sq. ft. recorded for 1H 2013
- Rental movements mainly within a 1% band with the exception of Tsim Sha Tsui, where pressure from returning space in the heavily-weighted ICC led to a 4% drop in the submarket’s average rents
|
|
Overall (Q2 2014) |
Overall (Q1 2014) |
Central (Q2 2014) |
Central (Q1 2014) |
|
Vacancy |
3.6% |
3.7% |
4.4% |
5.2% |
|
Rents |
HK$59.1 |
HK$59.6 |
HK$99.5 |
HK$99.6 |
Retail Market*
- The sales of some luxury products have dropped substantially (e.g. watch and jewelry has dropped by 39.9% y-o-y), and the sector has seen a softened leasing demand from retailers
- No apparent slowdown in demand from mass market retailers. Cosmetics retailers and pharmacies, for instance, remained active in securing retail space
- Prime street shop landlords have softened their stance in rental negotiations. The fall in rents, however, was only more noticeable in fringe locations
- Overall prime rents dropped 0.3% q-o-q.
Industrial Market*
- A continued growth of retained imports (5.9% y-o-y growth in Q1 2014) provided a strong platform for warehouse demand
- The leasing market continued to be handicapped by a lack of available space to accommodate sustained demand from retailer and third party logistics tenants
- Q2 2014 saw overall vacancy edging down 20bps to 0.4%
- Rents remained on the rise as landlords maintained their strong position in the prevailing low-vacancy environment
The full set of CBRE Hong Kong Q2 MarketViews will be available in mid-July.
Disclaimer:
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
