• Widespread business disruption resulting from the COVID-19 outbreak ensured real estate investment demand remained weak in Q1 2020.
  • Border closures and travel restrictions affected inbound real estate investment demand during the quarter.
  • Hong Kong commercial real estate investment volume (deals worth over HK$77 million, excluding pure land or related transactions) rose by 34% q-o-q to HK$7.5 billion in Q1 2020 – the second lowest quarterly total since Q2 2009.
  • The period saw a significant decline in office deals as falling rents and rising vacancy negatively impacted investor demand.
  • The COVID-19 outbreak will continue to curtail investment activity in the coming months. However, borrowing costs remain low and developers and landlords possess sufficient liquidity to withstand economic headwinds.
  • Local capital, primarily affluent developers and family offices, will continue to dominate purchasing activity.
  • Overseas investors will remain quiet due to ongoing travel restrictions, while Chinese buyers continue to be bound by measures to curb capital flight.