Hong Kong’s real estate investment rises 95% y-o-y in first half of 2021

Hong Kong, 05 August 2021 – Investment volume in Asia Pacific commercial real estate reached US$83.5 billion in the first half of 2021, representing growth of 39% year-on-year. according to JLL’s (NYSE: JLL) Asia Pacific Capital Tracker. The total investment volume in Hong Kong’s real estate rose 95% y-o-y in the first half of 2021.

In Asia Pacific, China, Australia and South Korea comprised 69% of the total investment volume, while activity in Japan was weaker due to disruptions from Covid-19. JLL analysis of capital flows in the second quarter of 2021 reveals that office, logistics and industrial, and retail investment made up 31%, 30% and 30% respectively.

“Asia Pacific real estate investment is clearly back as investors reaffirmed their positive outlook, ensuring a sizable upswing in year-on-year volume in the first half. We expect further activity in the second half of 2021 as investors look to portfolio deals, corporate sale and leasebacks, and seek more diversification into sectors like logistics and industrial, life sciences and multifamily,” says Stuart Crow, CEO of Capital Markets at JLL in Asia Pacific.

Logistics and industrial investment in Asia Pacific surged by 215% year-on-year in the second quarter to US$15 billion, supported by favourable demand dynamics driven by e-commerce expansion regionally, relative yield spreads and investors’ desire to diversify into more resilient asset classes. Major transactions, including the acquisition of the Milestone portfolio by ESR from Blackstone in Australia, were indicative of demand for high quality logistics and industrial assets in the region.

In Hong Kong, social tensions and the COVID-19 outbreak combined to pressure the city’s property market greatly since mid-2019, but the worst of it appears to be over with industrial sector picking up in the first half of 2021, seeing investment volume growth of 204% y-o-y.

Oscar Chan, Head of Capital Markets at JLL in Hong Kong, says: “In the first half of this year, we saw investors taking advantage of the upswing across Asia Pacific—especially in Hong Kong’s industrial sectors. We expect that investors will keep an eye on neighborhood retail and industrial properties in the second half of this year.”