“We are seeing increased interest in big-ticket deals in the market following the start of the rate cut, coupled with deeper price discounts, [and] end users and long-term investors are gaining confidence to enter into buying positions,” said Reeves Yan, executive director and head of capital markets at the commercial property company.
“Further rate cuts and monetary easing in the mainland China economy will possibly translate into a stock market rally and improve investment market sentiment in the few months ahead,” Yan said.
In the third quarter, commercial real estate (CRE) investment volume rose 22.6 per cent quarter on quarter to HK$9.97 billion (US$1.28 billion), the report said. Financially stressed assets accounted for HK$5.5 billion in investment volume, or 55 per cent of the quarter’s total, as pressure continued to mount on sellers to fulfil their loan covenants.
CBRE said in the third quarter, there were only 25 CRE transactions worth more than HK$77 million and most deals were smaller.
“Most deals were smaller sized, with 15 transactions involving a lump sum of less than HK$300 million,” it said.
Yan said CRE mortgage rates stood at around 6 per cent in the third quarter, down from 7 per cent in the year-earlier period. But yields for property investments stayed below 4 per cent.