Investment turnover for commercial properties drops 27% in H1

Investment demand for industrial properties slowed, too.

It has been observed that in Hong Kong's investment market, the investment turnover for commercial properties declined 27% y-o-y to a total of HK$33 billion in 1H 2016.

According to a research note from CBRE, to be specific, this involves deals over US$10 million, excluding pure land sales.

Also, the end of the revitalization scheme in April has seen investment demand for industrial properties slowed. Office remained the most popular sector for investors.

Further, deal size continued to be polarized, with only 20% of the deals were between HK$300 million and HK$1 billion in terms of consideration.

Fifty-two sales transactions worth over US$10 million were recorded in 1H, and 20 involved en-bloc acquisitions. End-users continued to be the major source of demand on the back of low vacancy across the office and industrial sectors.

Here's more from CBRE:

2016 2H outlook: Interest rates are expected to stay low for an extended period. En-bloc offices will remain sought after amongst all asset classes. Mainland Chinese enterprises will continue to be the key source of demand.

A few eye-catching commercial sites will be available from the government. Property yields may edge up as risks increase. Investable stock may increase as some risk-adverse vendors will opt to take profits.