According to JLL's latest Hong Kong Residential Sales Market Monitor report, after the government granted the tender for Kai Tak Area 4C Site 1, just two remaining residential sites on the Kai Tak runway could offer Victoria Harbour views. Because there is a limited quantity of land with a view of Victoria Harbour, developers will continue to be interested in purchasing plots in Kai Tak. rentcars
According to the Town Planning Board, there are just two remaining residential sites on the Kai Tak runway that could provide future units with Victoria Harbour views. However, because the spots are further out from the runway's end, the views will be more blocked.
Beyond Kai Tak, the number of Victoria Harbour oceanfront residential complexes developed in the city's metropolitan districts will be exceedingly restricted. Fewer than five such residential developments are expected to be completed between 2019 and 2020, according to our estimates on future supply.
Despite the rise of hostilities between the US and China, as well as a bout of societal unrest, the winning bid for the current Kai Tak location remains high. JLL's senior director of capital markets, Henry Mok, said: "The majority of future apartments on the plots in Kai Tak's former airway runway region will have uninterrupted sea views, and the market is already envisioning it as a future high-end residential neighborhood within the city. Developers from Hong Kong and the mainland were interested. On the remaining two waterfront sites, we expect developers to stay the course."
JLL's senior head of research, Cathie Chung, said: "Furthermore, in the first half of the year, 57 percent of the government residential sites up for tender were sold to mainland developers and their consortiums. It's up from 43 percent in the second half of 2018. It implied that mainland developers are bullish on the city's property market in the medium to long term. Another factor, we feel, is that the majority of the plots up for tender are in Kai Tak, which is a well-known market for mainland developers and is in a prime location. This prompted mainland developers to become more active this year."
Despite the US-China trade war, demand for Hong Kong logistics and industrial properties remains stable.
Despite the fact that the US-China trade war has cast a shadow over Hong Kong's economy, the industrial property market continues to be a bright spot, according to global real estate consultant JLL.
Demand for industrial property remained basically unchanged in May, driven by logistics companies' growth needs. Several significant transactions were noted. At the leasing market, Geodis expanded in Tuen Mun's YKK Building Phase 2, taking up the full 19th floor (34,100 sq ft). Meanwhile, Laws Property Group is said to have purchased an industrial building at 822 Lai Chi Kok Road in Cheung Sha Wan from Hang Lung Properties for HKD 1.4 billion (HKD 14,870 per sq ft), with plans to renovate it into an industrial, retail, and commercial property. The market appears to be benefiting from the government's plan to restore aging industrial buildings, as evidenced by these recent purchases.
JLL's Head of Research, Denis Ma, says, "Despite the macro-environmental concerns, investors continue to be drawn to the market by the growth potential of older industrial buildings that are appropriate for revival. The areas with the most interest are those with a large housing supply and those that are undergoing gentrification. This is one of the main reasons why we anticipate a 5% increase in the capital value of industrial buildings "in the year 2019."
In May, net absorption of 1.47 million square feet was recorded in the office leasing market. However, the realization of pre-commitments in recently finished buildings was responsible for a considerable amount of the increase. Net absorption was 196,400 square feet, excluding the impact of new supply. Tenants continued to seek out cost-effective solutions, so leasing activity remained concentrated in decentralized regions. FTLife Insurance allegedly leased 94,500 sq ft at NEO in Kwun Tong, relocating from offices in Sheung Wan, as one of the more prominent deals.
Overall, market rentals rose 0.3 percent month over month in May, with Tsimshatsui and Hong Kong East leading the way. The greatest gains were seen in Hong Kong East, where rents increased by 1.4 percent month on month as the vacancy rate fell to 1.5 percent at the end of May, the lowest among all districts.
JLL's Head of Markets, Alex Barnes, also had something to say about it: "Although vacancy rates have risen due to a recent slowdown in leasing activity in Central, we continue to see active growth requirements from a smaller segment of the financial and legal industries. As a result, any pressure on landlords to decrease rents significantly in the next months will be limited to a few buildings with a larger risk of vacancy."