BMI View: Despite suffering the effects of the financial downturn, Hong Kong remains one of the most competitive commercial real estate markets in the world, with few locations able to rival the city in terms of price and demand for prime office, retail and industrial space. In 2014, a buoyant local economy and limited supply are expected to maintain a steady market balance, though we caution that the sector faces a number of potential headwinds, resulting from the slowdown in neighbouring China.
The report, with a focus on Hong Kong's commercial office, retail and industrial sectors, covers rental market performance in terms of rates and yields over the past few years, as well as providing rental rate and net yield forecasts to 2018. BMI's in-depth analysis for each of these sectors also incorporates reports fed back to us from our in-country research teams and provides a snap-shot of the health of each market.
Robust growth in the Hong Kong economy will provide the platform for further stabilisation in the country's commercial real estate market after a period of fluctuating demand and rental rates following the 2008/09 financial crisis. Real GDP growth was estimated at 2.8% in 2013 and the economy is forecast to grow by 3.0% over 2014. Over the forecast period to 2018, average growth of 3.6% is expected, bolstered by spending growth from tourist arrivals and a highly urbanised population.
The Central Business District (CBD)'s office market will see office rental rates retain the increases experienced in the second half of 2013, having endured a period of declines over the past 12 months, which saw the market eclipsed by London's West End. One of the trends being reported in H114 was growing competition for prime office space driving developers to look for alternative premises with a number of former industrial units being redeveloped across the city.
Meanwhile, Hong Kong's growing reputation as a centre for high-end retail will continue to support the high...
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.
- 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).
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.
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.
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.
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.