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Q2 2016 RICS Commercial Property Monitor: Investment and Occupier Demands Fall for Fourth Consecutive Quarter

2016-07-25 16:52
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HONG KONG--()--The downward trend continued for the commercial real estate market in Hong Kong, revealed by theRICS (Royal Institution of Chartered Surveyors) Hong Kong Commercial Property Market Monitor for Q2, 2016. For the fourth consecutive quarter, demand and prices for commercial properties dropped, and rental rents and capital values are set to fall further.

The RICS Occupier Sentiment Index (OSI) slipped further, from -24 in Q1 to -31 for the past quarter, while the Investor Sentiment Index (ISI) dropped four points to -28 in the same period. The OSI and ISI are constructed by taking the unweighted average of readings for three series relating to each market.

In the residential market, a softening in demand from China and weaker global growth are impeding the external side of the economy. Survey respondents foresee Hong Kong residential real estate prices to fall by 6.3% over next year and around 15% over the next five years.

Retail rents fell by two percent in Q1, and are expected to fall by up to 10% over the coming 12 months. The respondents expressed negative sentiment in Hong Kong’s retail property, where volume is being predicted to tumble eight percent in the coming year.

“Slow economic growth weighs on the outlook for rents and capital values,” said RICS Hong Kong External Affairs and Public Concerns Committee Member Mr Frank Wong MRICS. “Retail volume has continuously dropped for several quarters and we expect retail rent to remain low next year. For the prime area, we foresee retail rents in Tsim Sha Tsui and Causeway Bay falling by 13% over the next year.”

RICS Global Commercial Property Monitor is a quarterly guide to the trends in the commercial property investment and occupier markets. The sentiment index introduced by the RICS economic department allows tracking of commercial property trends. The report is available from the RICS website www.rics.org/economics

About RICS

Confidence through Professional Standards

RICS promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure. Our name promises the consistent delivery of standards – bringing confidence to the markets we serve.

We accredit 118,000 professionals and any individual or firm registered with RICS is subject to our quality assurance. Their expertise covers property, asset valuation, real estate management; the development of infrastructure; and the management of natural resources, such as mining, farms and woodland. From environmental assessments and building controls to negotiating land rights in an emerging economy; if our members are involved the same professional standards and ethics apply.

We believe that standards underpin effective markets. With up to seventy per cent of the world’s wealth bound up in land and real estate, our sector is vital to economic development, helping to support stable, sustainable investment and growth around the globe.

With offices covering the major political and financial centres of the world, our market presence means we are ideally placed to influence policy and embed professional standards. We work at a cross-governmental level, delivering international standards that will support a safe and vibrant marketplace in land, real estate, construction and infrastructure, for the benefit of all.

We are proud of our reputation and work hard to protect it, so clients who work with an RICS professional can have confidence in the quality and ethics of the services they receive.

About RICS Asia

RICS Asia supports a network of over 20,000 individual professionals across the Asia region with an objective to help develop the land, property and construction markets in these countries, by introducing professional standards, best practice education and training. We promote RICS and our members as the natural advisors on all property matters. We also ensure that services and career development opportunities are provided to members.

RICS Asia region serves local member associations located in Brunei, Japan, Malaysia, Singapore, Thailand, The People’s Republic of China, Hong Kong SAR, Taiwan and South Korea. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Kiribati, Laos PDR, Macao SAR, Mongolia, Nepal, North Korea, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: www.rics.org.

 

Contacts

RICS Asia Public Relations Representatives
Ms Penn Leung, 3159 2986
penn.leung@creativegp.com
or
Ms Esther Kam, 3159 2978
esther.kam@creativegp.com