Spur in Hong Kong’s Commercial Real Estate Demand
Hong Kong’s commercial and industrial property transactions more than quadrupled in value this month, helped by Swire Properties’ sale of Cityplaza One, as deals increased in anticipation of the government’s move to scrap a double stamp duty for commercial real estate. The value of property bought and sold jumped to HK$13.74 billion (US$1.77 billion) for 318 deals in the first 22 days of November, from HK$2.62 billion for 208 transactions in the same period last year, according to data by Centaline Commercial. Swire sold Cityplaza One for HK$9.85 billion on November 9. The uptick in real estate transactions is a respite from an otherwise browbeaten market weighed down by Hong Kong’s worst recession on record, as a fourth wave of coronavirus infections knocks a nascent recovery in economic activity off track. In abolishing the double stamp duty, first introduced in February 2013 to cool an overheating market, the government is trying to breathe life into a market where transactions never surpassed 10,000 in any year since, plunging to as few as 4,666 deals in 2019, according to Land Registry data. Hong Kong’s government will abolish a double stamp duty first introduced in February 2013 on non-residential real estate when the city’s Chief Executive Carrie Lam Cheng Yuet-ngor delivers her annual policy address. Such a move would slash transaction costs for commercial real estate, where the duty for property valued at more than HK$20 million is as much as 8.5 per cent. The abolition was foreshadowed in August when the Hong Kong Monetary Authority (HKMA) relaxed the loans ceiling of non-residential real estate to 50 per cent of the property’s value, from 40 per cent. That helped to spur transactions, with Gaw Capital Partners leading a consortium of investors in paying HK$15,609 per square foot for Cityplaza One, a discount of 18 per cent compared with what Swire sold for two years ago.
Tags : INTERNATIONAL Real Estate commercial Industrial Property HKMA Hong Kong Monetary Authority