Hong Kong Is a Hot Bed for Real Estate Investments

Hong Kong Is a Hot Bed for Real Estate Investments

The annual report by Cushman and Wakefield that analyses real estate investment activity across the globe has declared Hong Kong to be the second most favored place in the world for real estate investments globally. The real estate sector has been hot in the city-state as there has been a considerable rise in the investment activity in the sector over the past few years. Hong Kong is now the only city in the Asian region that has stayed in the top five for three consecutive years.

Investments in the real estate sector have grown by 18%. The report reveals that the major chunk of investment activity has come from Asian investors. This makes Asia both an investment hot bed as well as the source of the major chunk of capital. 45% of this cross-border investment has been associated with Asian investors.

The rise in the demand for commercial properties across Hong Kong seems to be largely fueling the rise in overall investments in the real estate sector. There are an increasing number of foreign—mostly regional—firms that are moving their offices to the city-state of Hong Kong. The report reveals that Kowloon, the east constituency of the state of Hong Kong alone, attracted almost 66% of the new investments in real estate in terms of the floor area in the first half of the year.

Another report points out that there has been an increase in the culture of acquiring co-working spaces by businesses. The past few months saw a substantial demand surge in the co-working sector as both traditional occupiers and new movers have started trying out co-working spaces. The increasing number of co-working office operators has opened a new channel for growth in the leasing market where the growth in net-demand had been thin.

There are two things that are responsible for this increase in the popularity of co-working spaces in Hong Kong. One is the thriving startup culture in the city. Start-ups are pushed to make do with the little resources they have at hand and hence the idea of co-working spaces.

The other is the fact that traditional businesses are looking to cut costs and maximize space utilization by investing in co-working spaces.