Singaporean investors are actively acquiring office properties in Hong Kong, according to a report by the South China Morning Post, citing data from the real estate consulting firm Colliers.
Previously, mainland Chinese capital and global private equity funds dominated the Hong Kong office market, but Singaporean investments are now taking the lead. This shift is attributed to the belief that Hong Kong's real estate prices are nearing their bottom.
Office prices in Hong Kong have dropped by about 50% compared to their peak in 2019. The Hong Kong office market has faced a prolonged downturn due to several factors, including the rise of remote work during the 2020 pandemic, a decrease in buying activity from Chinese capital amid economic slowdowns, layoffs and withdrawals of global financial institutions due to U.S.-China trade tensions, and an increase in new office supply. Currently, the market is experiencing high vacancy rates, with both sale prices and rental rates declining.
Singaporean investors are focusing on distressed properties, purchasing them at prices below market value. Colliers noted, "Hong Kong real estate has undergone price adjustments for several years and is now at a very attractive level. At the current price point, the potential for recovery is greater than for further declines."
Despite the current market stagnation, Singaporean investors believe that Hong Kong's role as a financial hub remains strong and that global companies will return to the city. Key players in this investment trend include Singapore's sovereign wealth fund, asset management firms, real estate investment companies, and ultra-high-net-worth individuals, who are reportedly planning long-term investments of over ten years rather than seeking short-term gains.
* This article has been translated by AI.
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