RICS Q2 2017 Hong Kong Commercial Property Monitor: Offices continue to outperform by strong demand from Chinese enterprises

HONG KONG, CHINA–(Marketwired – Aug 2, 2017) – The Q2 2017 RICS (Royal Institution of Chartered Surveyors) Hong Kong Commercial Property Monitor revealed that the Occupier Sentiment Index (OSI) rose to six in Q2 from minus one in the previous quarter, and the Investor Sentiment Index (ISI) went slightly down to eight in Q2 from nine in Q1.
In the occupier market, the results show that the growth in demand for office space remains robust, while retail demand growth remains subdued. Office rents are expected to post a modest increase over the next quarter. Expectations remained nuanced between segments as a net balance of 63% of respondents expect office rents to increase while respondents expect a decline in retail rents.
“The demand of office market remains robust due to strong demand from Chinese enterprises that are expanding their offices in Hong Kong, especially on Grade A office,” said Mr Frank Wong MRICS, RICS Hong Kong External Affairs and Public Concerns Committee Member. He added, “Consumer behavior is changing and as the online shopping platform rises, the growth in demand for retail market lags.”
Capital values expectations remain robust for the next three and twelve months, with much of the positive sentiment driven by the office segment. Retail capital values are seen falling over the next three months, but flat over the next year. The majority (52%) of respondents see the market as approaching its peak (46% in Q1), although around one-quarter feel conditions are consistent with the middle stages of an upturn.
The RICS Hong Kong Commercial Property Monitor is a quarterly sentiment index tracking trends in the commercial property market. It is a leading indicator for global investment and occupier markets. The full report is available at www.rics.org/economics.
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