According to the latest report released by Knight Frank, the office and residential sales markets remained quiet last month, due to the continuing impact of the government’s market-cooling measures. However, the retail property sector showed some improvement, bolstered by active sales of subdivided units in a North Point shopping basement.
Prime Office
In July, sentiment in the Grade-A office-sales market remained cautious, due to the continuing impact of the Double Stamp Duty while leasing sector remained relatively active. A number of new leases involved in-house expansion.
Thomas Lam, Director and Head of Research & Consultancy, Greater China, at Knight Frank expects Grade-A office sales and leasing markets to remain stable, due to the government’s cooling measures and economic uncertainty with the possible retreat of quantitative easing in the US.
Residential
The number of new flats commencing construction surged 500% in the second quarter of the year to reach 6,600 units, the highest number since 2004. However, residential supply will remain tight in the short term. With various cooling measures remaining in place, Thomas expects the residential market to stay quiet and sales to fall about 10% in 2013. Mass residential prices will drop around 10%, while prices in the more resilient luxury sector will fall 5%.
Retail
Retail investment market seemed to improve in July, due to the overwhelming response from investors snapping up over 300 units in Maxi Base mall, located in the basement of City Garden Phases 1–3 in North Point. For leasing market, the change in the consumption pattern of Mainland tourists from the high to mid-end of the market continues, which gave a big boost to mid-end retailers. Thomas forecasts, retail rents in prime districts are set to remain stable in the second half of 2013, considering the tight supply of prime retail space and the projected sustained growth in inbound tourism.