The commercial real estate market in Hong Kong is reportedly showing no signs of slowing down as more and more Chinese investors spends record amounts for trophy buildings.
According to Gulf Times, while the brokers cannot be named in these types of transaction because the information is confidential, sellers are reported to have made offers to prospects that included Industrial & Commercial Bank of China, Bank of Communications and Fosun International, according to brokers who asked not to be named because the information is private.
AIA Group has been found out to be one of the bidders for commercial building owned by Swire Properties in Kowloon Bay that may cost a total of $1 Billion according to Hong Kong Economic Times
Hong Kong is known for having the most expensive office rental spaces in the world, thus Hong Kong is a choice of destination for Chinese companies who want to expand their brands globally. While the mainland economy plunging, Hong Kong seems to assure these investors that there is still potential for high returns. But buying a piece of rental real estate actually helps companies avoid risks associated with inflated rent in the future.
Evergrande Real Estate Group and China Life Insurance Co acquired office blocks for a total combined amount of $2.4 Billion. The transactions were separate.
One analyst, executive director for Institutional Investment Properties at CBRE Group John Davies, has shared his views on this, saying, "I expect this to continue as major occupiers in Hong Kong see a lack of future office supply and are concerned their rents will increase." He continued, "I still think major occupiers will look to buy their own buildings in Hong Kong - to satisfy occupancy needs and manage future costs and limit exposure to what will be office rental growth."
