S&P Global indicates that Hong Kong commercial real estate is experiencing a partial recovery.

NewsPoint Hong Kong Report: On April 2, S&P Global said that Hong Kong commercial real estate is seeing a partial recovery. The stable rebound in the financial sector has supported the rent for Grade A offices, while the influx of Mainland tourists has boosted discretionary retail consumption. S&P Global expects that although overall Hong Kong commercial rents may trend downward this year, the magnitude of the decline is expected to be smaller than in previous years. The rated landlords in the related sub-segments will see their credit conditions supported.

S&P Global Ratings credit analyst Edward Chan said that the market is currently highly differentiated, with positive signs of improvement, but at the same time there are also signals such as office supply oversupply being deeply entrenched and the retail industry facing structural challenges.

S&P Global said that Hong Kong’s Grade A office and retail markets are improving, and key indicators such as net absorption and retail sales growth have performed strongly. However, this round of recovery is not broad-based; it is focused only on specific Grade A office buildings and on some owners that are good at attracting luxury retail tenants.

S&P Global Ratings credit analyst Wilson Ling said that Hong Kong’s commercial real estate sector is beginning to stabilize, but only in specific sub-segments. Grade A office owners in prime locations, as well as owners that can attract tourists’ luxury spending, will benefit the most.

Disclaimer: The content and data in this article are compiled by NewsPoint based on publicly available information and do not constitute investment advice. Please verify before use.

(Editor: Guo Jiandong)

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