This is the weekly news wrap, featuring the latest real estate stories from Hong Kong. Whether your interest lies in industrial, retail, office real estate or asset investments, we have got the news that matters, covered.

Hong Kong Hotels May Become Office Complexes as Owners Eye Bigger Profits

South China Morning Post
Hong Kong’s tourism industry may be on the upswing after a three-year downturn as more tourists visit from the mainland, but this has not stopped hotel owners from planning to convert them into office complexes amid strong demand and the prospect of bigger profit. The Grand View Hotel, formerly known as Newton Inn, in North Point, and the Rosedale Hotel in Causeway Bay are two such properties that could see their new owners turning them into office towers.

Hong Kong’s richest man Li Ka-shing signaled he sees no end in sight for the demand in property that’s been driving up prices in the world’s most expensive real estate market. He also said he expects interest rates to rise once or twice this year.
HSBC warns against expecting Hong Kong interest rates to spike anytime soon, where abundant liquidity has fueled spectacular rallies in the stock and property markets. The bank says a key measure -- the aggregate balance maintained by commercial banks -- would need to plunge by US$10 billion for local rates to show any substantial gains. An outflow of that magnitude isn’t likely to happen quickly barring a big market shock unless there’s some unforeseen political crisis. 

South China Morning Post
Hong Kong Financial Secretary Paul Chan offered a gloomy forecast to Hong Kong homebuyers as America raised the rate for the fifth time since the end of 2015. At least three more upward adjustments are expected this year. The city’s homeowners may have a tough time keeping up with mortgage repayments this year as local banks are set to increase their prime rates to follow interest rate moves in the US.

A clear winner is emerging among Chinese equities this year, whether in Hong Kong or Shanghai: real estate. Property firms account for eight of the 10 best performers on MSCI’s gauge of offshore Chinese shares in January, while developers have rallied the most among industry groups on the Shanghai benchmark. Behind the optimism are bets that sales will rebound and local governments will loosen restrictions that were aimed at cooling home prices, according to Credit Suisse, which said last week mainland Chinese investors were especially keen on Hong Kong-listed Chinese developers.

CBRE in the News


Henderson Land Sells North Point Office Tower to Shenzhen Firm for Record US$1.27b
South China Morning Post
Features Stanley Wong, Executive Director, Capital Markets, Hong Kong

Price of Central Office Units Expected to Increase by 10% in 2018 Due to Lack of Supply (Chinese version only)
Hong Kong Economic Times
Features Tony Ng, Senior Director, Capital Markets, Hong Kong

No Chill: Property Prices Will Go Up and Up
Hong Kong Business
Features Marcos Chan, Head of Research, Hong Kong, Southern China and Taiwan