Widespread business disruption resulting from the COVID-19 outbreak ensured real estate investment demand remained weak in Q1 2020.
Border closures and travel restrictions affected inbound real estate investment demand during the quarter.
Hong Kong commercial real estate investment volume (deals worth over HK$77 million, excluding pure land or related transactions) rose by 34% q-o-q to HK$7.5 billion in Q1 2020 – the second lowest quarterly total since Q2 2009.
The period saw a significant decline in office deals as falling rents and rising vacancy negatively impacted investor demand.
The COVID-19 outbreak will continue to curtail investment activity in the coming months. However, borrowing costs remain low and developers and landlords possess sufficient liquidity to withstand economic headwinds.
Local capital, primarily affluent developers and family offices, will continue to dominate purchasing activity.
Overseas investors will remain quiet due to ongoing travel restrictions, while Chinese buyers continue to be bound by measures to curb capital flight.