Industrial and commercial property turnover will fall next year
Jones Lang LaSalle expects that the investment demand in the Mainland will continue to be weak, and the total transaction volume of industrial and commercial properties will fall next year. At the same time, the price of Grade A office buildings will fall by 5% to 10% next year. Shop prices are down by up to 5%.
Zeng Huanping, managing director of Jones Lang LaSalle, said that with the bleak local economic outlook and the impact of interest rate hikes, investors will wait and see, they will require a rate of return increase of at least 3% to consider investment; plus the overall environmental uncertainty, investment In order to ensure higher rental returns for office and retail investors, this will result in a slight decline in these investment properties.
Looking back this year, Jones Lang LaSalle said that Grade A office leasing still recorded a net absorption of 280 million baht, a three-year high; rental demand fell in the second half of the year; but this year’s Grade A office rents in Central reached a record high, according to The annual increase was 7.5% to $127.4; the overall office rent was recorded at 7%.
Buyers take a wait-and-see attitude
In addition, Colliers International published the latest “2018 Hong Kong Investor Survey Report" yesterday, saying that investors in Hong Kong believe that the investment market will slow down next year, and most buyers take a wait-and-see attitude.
Although the survey found that the Sino-US trade war is regarded as the only crisis facing the market in the next year, many investors are still optimistic about China’s long-term growth. The first-tier cities in the Mainland are still the main investment targets of investors in Hong Kong. Interested in the transfer of non-performing assets and property transferred by owners with financial pressure next year.
In terms of transactions, the total transaction volume of commercial properties of 30 million yuan or more fell sharply by 78% in the third quarter of 2018 compared with the same period of the previous year, with only 8.2 billion yuan (about 1.05 billion US dollars). Overall, investors expect only a slight or moderate adjustment in the market. Respondents believe that real estate prices outside the Hong Kong residential market will fluctuate between -5% and +5% in 2019.
40% of respondents are interested in investing in Dawan District
The survey also showed that 40% of the respondents were interested in investing in Dawan District in 2019. Among the many cities in the Greater Bay Area, respondents were particularly interested in two major cities, Shenzhen (29%) and Guangzhou (29%). As many as half of the investors interested in Dawan District are interested in residential development land in all cities in the region, followed by commercial development land (16%).
When making investment decisions in 2019, geopolitical situations are more important than economic considerations. Investors expect market growth in Hong Kong and mainland cities to slow down in 2019, while investment prospects in Singapore, Tokyo and Seoul are more optimistic.