Business Monitor International


Hong Kong Real Estate Report

Published 13 November 2014

  • 72 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
Hong Kong Real Estate Report

BMI View: Hong Kong, as a global financial hub and a gateway to mainland China, has one of the most dynamic commercial real estate markets in the world. Rental rates, particularly for retail, are among the highest in the world, and the market has traditionally been characterised by strong demand and, due to its small size, limited supply. With the market vulnerable to the impact of an economic slowdown in China, the medium-term outlook is one of stability in rental rates.

Hong Kong is a Special Administrative Region (SAR) of the People's Republic of China. It is governed under the principle of 'one country, two systems', which means that it retains many institutions, for example its common law legal system, that date back to its time as a British colony. All this gives a level of predictability to the business environment, although tensions with Beijing over the level of democracy allowed in Hong Kong do arise from time to time, as witnessed in the protests in the latter part of 2014.

Hong Kong's economy is closely linked to that of China, leaving the SAR particularly exposed to any potential slowdown in the mainland. The main risk to our outlook for the commercial real estate sector is thus a sharper-than-expected slowdown in China. However, other risks are the impact of rate rises in the US, any renewed crisis in the eurozone and, closer to home, any downturn in consumer confidence resulting from a fall in residential real estate prices.

The office market is currently characterised by moderate supply and demand. However, as a global financial hub, Hong Kong's office real estate market is highly developed, and we do expect demand to continue to meet the space available, with particular interest from international and mainland Chinese firms. Demand for premium space in the central business district will be the key driver of the office market, although we are also noting a trend of increasing development in more suburban areas.

Hong Kong's retail market is one...

Table of Contents

BMI Industry View
7
Key BMI Forecasts
8
Recent Developments
8
SWOT
9
Political
11
Economic
12
Business Environment
13
Industry Forecast
14
Office
15
Table: Office Forecast Rents - (USD a m2/month)
16
Table: Office Forecast Net Yield, 2011-2018 (%)
16
Retail
16
Table: Retail Forecast Rents - (USD per m2/month)
17
Table: Retail Forecast Net Yield, 2011-2018 (%)
17
Industrial
18
Table: Industrial Forecast Rents - (USD per m2/month)
18
Table: Industrial Forecast Net Yield, 2011-2018 (%)
18
Construction And Infrastructure Forecast Scenario
19
Table: Construction And Infrastructure Industry Data (Hong Kong 2012-2017)
19
Table: Construction And Infrastructure Industry Data (Hong Kong 2018-2023)
20
Macroeconomic Forecasts
28
Economic Analysis
28
External Trade Not What It Seems
28
Property Correction Informs Below Consensus Forecast
30
Expenditure Breakdown
30
Table: Hong Kong - Economic Activity
31
Industry Risk Reward Ratings
32
Asia - Risk/Reward Ratings
32
Table: Asia Real Estate Risk/Reward Ratings
32
Hong Kong - Risk/Reward Ratings
33
Rewards
33
Risks
33
Market Overview
35
Office
36
Table: Historic Rents - 2012-2013 (HKD per m2/month
38
Table: Net Yield, 2012-2014 (%)
38
Table: Terms Of Rental Contract/Leases - H213
39
Retail
40
Table: Historic Rents - 2012-2013 (HKD per m2/month)
41
Table: Net Yield, 2012-2014 (%)
42
Table: Terms Of Rental Contract/Leases - H213
42
Industrial
43
Table: Historic Rents - 2012-2014 (USD per m2/month)
45
Table: Net Yield, 2012-2014 (%)
45
Table: Terms Of Rental Contract/Leases - H213
46
Competitive Landscape
47
REITs
47
Real Estate
47
Construction Companies
48
Company Profile
49
Cheung Kong (Holdings)
49
Chinese Estates Group
52
Henderson Land Development
55
Sino Group
57
Sun Hung Kai Properties
59
Demographic Forecast
61
Table: Hong Kong's Population By Age Group, 1990-2020 ('000)
62
Table: Hong Kong's Population By Age Group, 1990-2020 (% of total)
63
Table: Hong Kong's Key Population Ratios, 1990-2020
64
Table: Hong Kong's Rural And Urban Population, 1990-2020
64
Methodology
65
Industry Forecast Methodology
65
Sources
66
Risk/Reward Ratings Methodology
66
Table: Real Estate Risk/Reward Ratings Indicators
68
Table: Weighting Of Indicators
69

The Hong Kong Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Hong Kong Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Hong Kong.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for Hong Kong to test other views - a key input for successful budgeting and strategic business planning in the Hong Kong real estate market.
  • Target business opportunities and risks in Hong Kong through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Rankings

BMI's Real Estate Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc