Southeast Asian capital, led by Singapore, now eclipses mainland Chinese as the city’s leading non-local commercial property investors
Southeast Asian investors have emerged as the largest non-local buyers of Hong Kong commercial property, led by Singapore-based capital, according to a property consultancy.
As of Tuesday, local and non-local investors – including those from mainland China – were behind an estimated HK$30.36 billion (US$3.87 billion) in transactions involving commercial property deals above HK$50 million in Hong Kong so far this year, data compiled by the property consultancy showed.
Southeast Asian investors contributed HK$3.37 billion – or more than 11 per cent – of the total value, the property consultancy said.
Mainland buyers contributed HK$1.75 billion, or 5.8 per cent, while Hong Kong-based capital accounted for HK$25.25 billion, or 83.2 per cent.
“Southeast Asia’s share has risen against a much smaller non-local pool – it is roughly two-thirds of all non-local investment this year,” a property consultant said.
Last year, mainland investors topped non-local buyers with HK$16.06 billion, or nearly 34 per cent, of the HK$47.32 billion total, followed by US and Canadian buyers with HK$7.58 billion, or 16 per cent.
Southeast Asia ranked third with HK$1.74 billion, or 3.7 per cent, while those from Europe bought HK$940 million worth of commercial property assets or 2 per cent of the total.
Western investors have been absent this year, the property consultancy’s data showed.
Some of the assets that Singaporean firms and investors bought so far this year included 152,000 square feet of space across several floors at The Center , which DBS Bank (Hong Kong) acquired for about HK$2.62 billion, and One Bedford Place , an office building with 184,041 square feet in Tai Kok Tsui, which Wee Hur Holdings purchased for HK$748.8 million.
Although classified as an asset under residential property, luxury estate Jadebeach Villa in Chung Hom Kok, Southern district, was also acquired for nearly HK$1.17 billion by a Singapore-based group in a deal registered last week, according to Land Registry records.
The Style Limited was named as the buyer of the 30-unit enclave. Its directors were Singapore passport holders Luk Kwok Wing and Wee Teng Yuan, according to the Companies Registry.
Meanwhile, Centurion Holdings had provisionally agreed to purchase Yan Wo Building in North Point for HK$364 million, according to Land Registry records dated August 25. It is reportedly the local unit of Singapore-listed Centurion Corporation.
To said that, based on the deals, Singapore investors fell into three categories: corporate occupiers such as DBS (Hong Kong), private family capital such as The Style Limited, and operator capital such as Wee Hur and Centurion, “which already run student accommodation platforms” in Singapore, Australia and the UK.
“They are bringing an operating business into a market where policy created demand faster than supply could respond,” the property consultant said.
The property consultant pointed to the “Hostels in the City” scheme, which allows commercial buildings to be converted into hostels without planning approval while preserving floor area.
The property consultant said the quota for non-local students “has been raised from 20 to 40 and then 50 per cent”, further fuelling demand.
Despite a potential interest rate increase, The property consultant added that Singapore-based investors were likely to keep buying Hong Kong assets.
“Pricing has reset far enough for buyers without legacy Hong Kong exposure to underwrite assets that local owners are having to release,” the property consultant said.
“All three [categories] to continue [buying] will be expected, and the operator capital in particular to keep going into the living sector rather than into core commercial.”
