According to the Hong Kong Monthly Report released by Knight Frank, during July 2014, the Grade-A office leasing market was quiet, but the office sales market continued to improve. Developers continued to launch primary residential projects with sweeteners. In the retail property market, shopping centre and prime street shop rents remained resilient.
Prime Office
In July 2014, amid an atmosphere of economic uncertainty, the Grade-A office leasing market was quiet, but the office sales market continued to improve, with acquisitions being made by both investors and end-users. The buying sentiment for en-bloc office buildings continued to improve in July.
The absorption rate of offices in Kowloon East slowed down last month, mainly due to abundant supply in the secondary market. David Ji, Director and Head of Research & Consultancy at Knight Frank Greater China expects Grade-A office rents in Kwoloon East to drop slightly over the rest of the year.
Residential
In the residential sector, developers continued to launch primary projects with sweeteners, while in the second-hand market, activity was slow down when faced with competition from the primary sector and landlords standing firm on asking prices.
Despite the rising supply of primary homes, mass home prices have held up recently due to sustained demand from local end-users and home upgraders. David forecasts that mass home prices will remain stable or only fall slightly by less than 5% in 2014.
Retail
In the retail property market, shopping centre and prime street shop rents remained resilient, while those in secondary streets fell in tandem with rising vacancy rates. Consumer demand from Mainland Chinese has moved towards the mid-end of the market. Demand for retail space continued to be driven by mid-end retailers. In contrast, luxury retailers are showing more reluctance to expand, which has led to less demand for prime retail space. Few deals were recorded in the luxury sector in July.