\n<\/p>\n
HONG KONG SAR –\u00a0Media \u00a0<\/p>\n The Residential Market<\/u><\/b>: <\/b><\/p>\n Mr Alva To, Cushman & Wakefield<\/a>‘s Vice President, \u00a0<\/p>\n Property transaction volumes in terms of Sales and \u00a0<\/p>\n Residential S&Ps were down by 3% <\/p>\n q-o-q with the expectation that they will continue to edge \u00a0<\/p>\n The impact on the luxury residential segment was more severe as some estates The Investment Market<\/u><\/b>: <\/b><\/p>\n The Investment market remained subdued in Q4 2020, capping a challenging \u00a0<\/b><\/p>\n Mr Tom Ko, Cushman & Wakefield’s Executive \u00a0<\/p>\n Overall The Office Market<\/u><\/b>: <\/b><\/p>\n Grade A office rentals extended their declines in Q4 for a \u00a0<\/p>\n Weak demand pulled \u00a0<\/b><\/p>\n Mr. John Siu, Cushman & Wakefield’s Managing \u00a0<\/i><\/b><\/p>\n Mr. Keith Hemshall, Cushman & Wakefield’s Executive Director & The Retail Market<\/u><\/b>: <\/b><\/p>\n The retail \u00a0<\/p>\n Retail sales across most sectors \u00a0<\/p>\n Mr Kevin Lam, Cushman & Wakefield’s Executive Director, Head Please Photo Caption<\/p>\n From Left to Right: Mr. Keith Hemshall, \u00a0<\/b><\/p>\n<\/p><\/div>\n\n
\nOutReach<\/a>\u00a0– 9 December 2020 –\u00a02020 has undoubtedly
\nbeen one of the most challenging years for Hong Kong in recent decades. The
\nproperty market, as one of the key economic pillars of Hong Kong, has been hard-hit
\nat multiple levels. Although the outlook remains gloomy, there are early signs
\nof recovery towards Q2 or Q3 2021 once a vaccine becomes available and if
\nvarious sectors are able to embrace new and flexible strategies to grow. <\/p>\n
\nGreater China & Head of Consulting, Greater China<\/b>, commented, “The first-hand
\nmarket remained strong in Q4, mainly due to strong pent-up demand and favorable
\nmortgage benefits. On the other hand, the second-hand and luxury markets continued
\nto suffer as a result of economic weakness caused by the pandemic. As the economy remains weak, we forecast the residential
\nmarket to remain under pressure for the remainder of 2020 and into Q1 2021. Though
\nmuch depends on the course of the pandemic and the timing of a vaccine, the
\nmarket is expected to begin to stabilize in Q2 2021 at the earliest.”<\/p>\n
\nPurchase Agreements (S&Ps) in 2020 fell to the second lowest level in the
\npast decade, recorded only 73,253 YTD. The decline was largely driven by a drop-off
\nin non-residential transactions, which fell to the lowest level in a decade, and
\neven lower than during SARS. <\/p>\n
\nlower in December as the city is hit by a fourth wave of COVID-19 cases. Among
\nresidential segments, the impact on the mass market was relatively mild, with prices at City One and Taikoo Shing down by 5.4% and 12.6% y-o-y
\nrespectively. <\/p>\n
\nhave suffered from a decline in mainland Chinese demand during the pandemic.
\nPrices at Residence Bel-Air (Phase 2) fell by 10.8% in 2020 while those in the
\nHarbourside plummeted by nearly 25% in the year.<\/p>\n
\nyear in which the overall real estate investment fell to the lowest level in
\nthe past decade. As of today, a total of only 169 major transactions (each with
\na consideration of over HK$100 million) have been recorded. The commercial
\nproperty sector was hardest hit in the year with just 60 major transactions
\nrecorded, down further from the 89 transactions recorded in 2019.\u00a0 <\/p>\n
\nDirector, Capital Markets in Hong Kong,<\/b> said, “The commercial property sector was hit the hardest in 2020 with total transactions in in
\nthe year down by more than 70% from the recent peak in 2018. Favorable
\nfactors including the relaxation of mortgage rates and the abolition of double
\nstamp duty on non-residential properties offered a temporary boost especially for
\nsmall-scale transactions. The investment market is expected to bottom out in
\n2021 and the number of non-residential transactions is forecasted to rebound to
\na level exceeding that of 2019.”<\/p>\n
\ninvestment volume in Q4 remained at a similar level to Q3, while investment
\ninto primary residential remained the most active among all sectors, accounting
\nfor almost half of the total transactions. The commercial transaction volume doubled in Q4, but
\nwas largely attributable to the en-bloc sale of Cityplaza One in Hong Kong East
\nfor HK$9.85B. <\/p>\n
\nseventh consecutive quarter, with the overall average rent in Hong Kong falling
\n5.5% q-o-q and 18.7% YTD, returning them to their level in Q2 2015. Rents in
\nPrime Central and Greater Central down by 20.9% and 21.3% YTD respectively,
\nwhile all submarkets continued to come under significant pressure as demand remained
\nweak.<\/p>\n
\nnet absorption YTD down to -2 million sq.ft., in what was the worst
\nperformance on record. Overall availability climbed to 12.1%, the highest
\nlevel since Q1 2005, as availability in all districts with the exception of
\nHong Kong East, \u00a0climbing into double
\ndigits in the quarter.<\/p>\n
\nDirector, Hong Kong<\/b>, commented, “Hard hit by the
\npandemic, 2020 was extremely challenging for companies, and the weakness is likely
\nto extend into 2021 with rents forecast to fall further by as much as 16% and
\navailability climbing to about 14%. Net absorption is forecasted remain in negative territory,
\nranging from -650,000 to -700,000 sq. ft. as demand is set to remain weak in 2021.
\nDespite the limited new supply scheduled for 2021, the 4.2 million sq. ft. new
\nsupply from nine projects planned in 2022 is expected to continue to weigh on
\nrentals. Should the COVID-19 vaccine become available by mid-2021, that should
\nsupport some recovery in demand.”<\/p>\n
\nHead of Office Services, Hong Kong, commented, <\/b>“Office rents will continue their
\ndownward trajectory as demand remains weak and availability rises. Large occupiers with leases expiring
\nin 2022\/23 will seek to leverage against over four million square feet of new Grade
\nA supply completing in 2022. Decentralization will accelerate as occupiers seek to cut costs and
\naccordingly Landlords in core districts will come under increasing competition
\nto retain existing tenants and backfill vacant space, resulting in increasingly
\nfavorable packages being offered. Meanwhile, small occupiers will continue to consider serviced offices as
\nan option to maintain flexibility and avoid upfront capex. The service office
\nsector continues to evolve as Landlords are now entering the market in direct
\ncompetition with established players.”<\/p>\n
\nmarket continued to be hard-hit by a fourth wave of COVID-19 cases in Hong
\nKong. Retail sales in the first 10 months of 2020 dropped by 27% y-o-y, led by
\nthe decline of jewelry & watches (57.3%) and medicine and cosmetics
\n(51.8%). <\/p>\n
\nremained weak through October, as sales remained reliant solely on local
\nconsumers in the absence of tourist arrivals during the pandemic. Retail sales of daily necessities remained resilient due to
\nsocial distancing measures, with supermarket sales up 10.3% y-o-y. Vacancy
\nrates across submarkets remained elevated while dipping slightly in Causeway
\nBay, but it may begin to fall in coming months as some landlords turn to
\nshort-term leases to fill spaces.<\/p>\n
\nof Retail Services, Hong Kong<\/b>, commented,
\n“The retail market
\nhad a tough year in 2020 as one of the sectors hardest hit by COVID-19. We do
\nbelieve rentals will stabilize in 2H 2021 when tourists are likely to return as
\na result of effective vaccination. Meanwhile, with
\nflexible leasing package for small tenants with innovative centralized
\nmanagement, we see potential for a growing trend in food halls to support the
\nF&B sector.” <\/p>\n
\nclick HERE<\/a>
\nto download the event photo.<\/p>\n
\nCushman & Wakefield’s Executive Director & Head of Office Services,
\nHong Kong, Mr Tom Ko, Cushman & Wakefield’s Executive Director, Capital
\nMarkets in Hong Kong, Mr. Keith Hemshall, Cushman & Wakefield’s Executive
\nDirector & Head of Office Services, Hong Kong, Mr Alva To, Cushman &
\nWakefield’s Vice President, Greater China & Head of Consulting, Greater
\nChina (Centre), Mr. John Siu, Cushman & Wakefield’s Managing Director, Hong
\nKong <\/p>\n
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