“These latest arrangements will help boost positive market sentiment, and send an important message to the international community that Hong Kong is resuming its normal social and economic activities,” Tim Blackburn, CEO of Swire Properties, told the Post.
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China opens thousands of ‘fever clinics’ as it shifts Covid focus from prevention to treatment
“This will also facilitate international travel and help Hong Kong retain its status as an international financial centre.”
Swire Properties’ investment portfolio comprising about 16.8 million sq ft includes Taikoo Place, Cityplaza, Pacific Place and Citygate Outlets. With the stabilisation of the coronavirus pandemic and the easing of social-distancing measures, market sentiment will improve, Blackburn said. Swire Properties expects various sectors, including retail, office and tourism to benefit, he added.
There had been an uptake in shopping sentiment, with the relaxation of Hong Kong’s pandemic measures, Blackburn said. There is also pent-up demand for outbound travel, but he believes this will have a short-term impact on retail in the city. “Local retailers will have to continue investing in different marketing campaigns and loyalty programmes along with exciting promotions to attract customers,” Blackburn added.
Rents of high-street shops in Hong Kong have dropped by 10.6 per cent this year and are 75.5 per cent below a market peak seen in the third quarter of 2014, according to JLL. The vacancy rate for these shops has grown to 16.6 per cent, with tourists yet to return, JLL added. Rents of prime shopping malls have fallen 5.2 per cent this year.
The overall office market has remained soft as well, due to macroeconomic and geopolitical uncertainties, said Swire Properties’ Blackburn. The overall office vacancy rate rose to 11.6 per cent at the end of November from 9.4 per cent at the end of December last year, according to JLL. The overall grade-A office rents declined marginally by 3.3 per cent in the first 11 months of this year, JLL said.
The Hong Kong Monetary Authority (HKMA) on Thursday raised the city’s base rate by 50 basis points to 4.75 per cent, close to the record 5 per cent seen in January 2008. The HKMA must act in lockstep with the US Federal Reserve, which has raised its target rate by the same quantum to between 4.25 per cent and 4.5 per cent.
Despite the challenges in recent years, Central’s office market has been resilient and has outperformed other districts in Hong Kong, said Hongkong Land’s Anderson.
Hongkong Land’s Central office portfolio has seen vacancies on a committed basis fall to 4.8 per cent as of September 30, from 5.1 per cent as of June 30, Anderson said. The vacancy rate for the overall Central grade-A office market stood at 8.3 per cent at the end of September, Anderson added, citing JLL data.
“We believe this can certainly be attributed to the various initiatives we have in place to attract new tenants, as well as [to] retain the loyalty of our existing tenants,” he said.
