Hong Kong is missing out on an office investment boom in the Asia-Pacific region this year as a supply glut and high vacancy rates put investors off the segment, according to analysts.
In the first three months of the year, investment in office space in Hong Kong amounted to HK$242 million (US$31 million) in the form of two deals, according to Colliers.
The entire Asia-Pacific region received US$11.5 billion of investment in office property in the quarter, with Japan, South Korea, China, Taiwan and Australia taking the largest shares, the property consultancy said.
Japan saw 50 deals worth about US$4.4 billion, while South Korea saw 31 office properties change hands for US$2.75 billion. In mainland China, investment came to US$1.8 billion via 23 deals, while Taiwan recorded US$800 million of transactions followed by Australia’s US$497 million, according to the data compiled by Colliers.
“I don’t think the office sector in Hong Kong will pick up very quickly [as there is a] high vacancy rate and there will also be more supply coming up in the next few years,” said Thomas Chak, co-head of capital markets and investment services at Colliers Hong Kong, during a webinar discussing the state of investment in the region’s property market.
Vacancy estimates vary considerably among property agencies but all point to an office real estate segment that is doing poorly.
For example, Colliers said the vacancy rate in Hong Kong’s prime office space hit a record of 15.1 per cent towards the end of August last year. Knight Frank, meanwhile, said it peaked at 12.2 per cent in March this year. Source: scmp
