Commercial buildings stand in the Central area of Hong Kong, Jan 20, 2017. (EDMOND TANG / CHINA DAILY)

Hong Kong’s real estate market saw a growth in the second quarter of 2022 compared with the previous quarter, with a total consideration expected to hit HK$28 billion (US$3.57 billion) in the first half of the year, global real estate services firm Cushman & Wakefield said at a news conference on Tuesday.

Industrial buildings accounted for a 32 percent share of the total consideration, surpassing a 10-year average of 15 percent, while hotel assets traction accounted for a 20 percent share of the total consideration, a fivefold increase on last year

The total consideration of commercial real estate investment in the city is expected to fall by 35 percent year on year in the first half of 2022 under the downward economic environment caused by the fifth wave of the COVID-19 pandemic. Nevertheless, the performance is still expected to be up 28 percent compared with the same period in 2020.

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“The average deal size has trended downwards due to the continuation of the pandemic, as investors buckled up and focused on investments with smaller capital lump sums,” said Keith Chan, Cushman & Wakefield’s head of research for Hong Kong, adding that investment sentiment is expected to improve in the second half of the year as the pandemic is gradually contained.

Meanwhile, the firm predicts that the total transactions for the full year will reach HK$70 billion, outperforming 2019 and 2020.

Among all the sectors, industrial assets, hotels, and development sites were the most active in the first half of 2022, according to Cushman & Wakefield. Industrial buildings accounted for a 32 percent share of the total consideration, surpassing a 10-year average of 15 percent, while hotel assets traction accounted for a 20 percent share of the total consideration, a fivefold increase on last year.

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“The significant reduction in tourism activities has adversely affected the hotel business in the city, and many hotel owners have been willing to sell assets at a discounted price,” said Chan. 

In addition, the company said that the operation of the East Rail Line will spur the capital appreciation in properties located along the rail line, especially in the Wan Chai North district and around the Hong Kong Convention and Exhibition Centre.