1. Luxury prices will continue to hit record highs
Strong housing demand from buyers in Hong Kong will persist and the residential market especially the luxury sector will remain resilient despite the pandemic. As high-net-worth-individuals uphold an optimistic outlook on the housing market, we expect transaction prices in the luxury sector to continue to reach new highs in 2022.
2. Hybrid work model is the new normal
The hybrid work model with a combination of work in the office and work from home is likely to become the new normal. Many businesses will take this opportunity to adjust their workplace configurations and review their long-term real estate strategies.
3. Local consumption will dominate the retail market
Due to the lack of inbound tourism, local spending will remain the major force in supporting the retail market. E-commerce will continue to flourish, while the affordable brands, daily necessities and well-being related products will become more favorable, supporting retail rents in community areas.
4. ESG driving investor and occupier decisions
As investors enjoy strong growth in green bonds and loans, we expect more Hong Kong companies to integrate ESG factors into their decision-making and corporate requirements. ESG will give a lasting competitive advantage in the business world.
5. Asset repurposing is on the radar
A growing number of landlords and investors are eyeing underperforming assets, especially hotels and obsolete buildings with repurposing potential with the aim of transforming them into “new economy assets” – such as logistics and data centres, and co-working spaces at a favourable entry price.