A recently chosen leadership team is likely to help boost Hong Kong real estate in what is already one of the world’s most expensive cities, according to a property research agency.
The administration headed by Chief Executive John Lee, who took office on July 1, is expected to “revitalise the economy”, CBRE Hong Kong said.
The Chinese territory has faced several years of turmoil, as popular anti-government protests were followed by a Beijing-led crackdown on political activity and the crippling Covid-19 pandemic that saw borders largely shut.
“The new administration has given landlords a boost of confidence towards the prospect of the retail market, and they have taken a firm stance on rental negotiation,” said Lawrence Wan, CBRE’s senior director for retail advisory and transaction services.
“In general, landlords feel that the high-street rents already bottomed out, hence they are expecting rents to be stabilised or to be improved from the current levels.
Besides, landlords believe that the continuing impact of the pandemic on the Hong Kong real estate market will be limited in the future, as renters have mostly adapted to the new circumstances.
Home rents will rise in 2022 by as much as 5%, Midland Realty said in an earlier outlook for the Hong Kong real estate market.
Wan said business rentals are also looking solid, with retail operators planning to open new stores in the next year. “The healthcare industry, supermarkets, high-end household goods and daily necessities are more active in terms of expansion.”
Food and beverage is also expected to recover. “Restaurateurs tend to favour spaces with kitchen equipment and décor left behind by the previous owner as a way to save the start-up costs,” Wan added.
- George Russell
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