Real estate investment volumes jumped 16% to $399.8m in 2018: report

Hong Kong's growth placed it as the ninth largest source of real estate investments globally.

Hong Kong trailed behind China and Switzerland as the ninth largest source of real estate investments globally, according to Cushman & Wakefield’s 2019 Global Investment Atlas report.

The make-up of cross-border investment from Asia Pacific (APAC) altered, with both mainland Chinese and Hong Kong investors falling five places in the ranking. Singaporean outbound capital, by comparison, grew 12.3% YoY, to place fourth for cross-border flows. The US, Canada and Germany came out on top as the largest sources of cross-border real estate investments globally. Rounding off the top 10 was South Korea.

“Overall, property companies and institutions pulled back on investment. Whilst developers continued to be the most active, equity funds and high net worth individuals increased their buying compared to the previous year,” the authors highlighted.

The report noted that investment volumes jumped 16% YoY to hit $399.8m (US$50.93m) in 2018 from 2017’s $345.63m (US$44.03m). Including development land, APAC continued to attract the greatest amount of investment, accounting for 50% of transactions in 2018. European volumes on the other hand fell 10% YoY, to reflect the region’s lowest ever share of investment, whilst the North American real estate market outperformed, documenting growth of 16.9% YoY, and a 31% share of total investment.

Hong Kong’s office yield stood at 2.18%, compared to Singapore’s 8% and China’s 4.4%, the authors added.

According to the report’s authors, Hong Kong’s core logistics sector may provide potential for investment based on both growth and risk characteristics.