• Positive impact of DSD relaxation starts to realise

    15 July 2014

    10 July 2014 (Hong Kong) – According to the Hong Kong Monthly Report released by Knight Frank, during June 2014, the Grade-A office leasing market was stable with the continuing support of Mainland firms. Sentiment in the residential market notably improved in June. Meanwhile, retail sales value decreased 4.1% in May year on year.

    Knight Frank

    Prime Office

    In June 2014, the Grade-A office leasing market was stable with the continuing support of Mainland firms, while the sales market was robust with active acquisition by end-users for long-term business development. On the leasing fronts, rents remained relatively stable in Wan Chai and Causeway Bay with tight supply and low vacancies. Premium office buildings in Central recorded slight increments in rents.

    David Ji, Head of Research & Consultancy, Greater China at Knight Frank believes, “Chinese firms will continue to expand in Hong Kong and remain the key pillar supporting the office rental market.”

    Residential

    Developers continued to launch primary projects with sweeteners, while in the second-hand market, activity also improved with relaxed Double Stamp Duty (DSD). Although residential sales continued to be dominated by end-users, investors have begun to return to the market.

    Several new residential projects will soon be launched. David expects transaction volumes to increase further in the coming months with the release of accumulated purchasing power.

    Retail

    The anti-corruption campaign in Mainland China continued to suppress the sales of luxury goods in Hong Kong, which led to a drop in leasing demand from related retailers. However, demand from mid-end retailers remained active as a result of the change in the spending pattern of Mainland visitors.

    Regarding the government’s proposal to control the number of Mainland visitors by adjusting the Individual Visit Scheme (IVS), David does not expect overall retail sales and rents of retail properties to experience notable changes.

     

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