Despite macroeconomic instability, Hong Kong's residential market recovery remains robust, according to a Goldman Sachs research report. The Centa-City Leading Index (CCL) has risen 6.6% year-to-date, while total transaction volume in March increased 17% year-over-year to 6,000 units. Among developers, SHK PPT (00016) outperformed the sector in the first quarter with approximately HKD 13 billion in contract sales, capturing a 25% market share. HENDERSON LAND (00012) and NEW WORLD DEV (00017) accounted for 9% and 6% respectively. The firm maintains its forecast for a 12% year-on-year increase in property prices for 2024.

In the office sector, recovery has progressed faster than expected, supported by a rebound in IPO activity. Although net absorption declined temporarily, average monthly rents edged up 0.1% month-on-month in March, with a cumulative increase of 1.5% year-to-date. Leasing demand remains concentrated in core areas such as Central and Tsim Sha Tsui, representing about 50% of total transactions. Goldman Sachs previously projected overall office rents to remain flat year-on-year, with Central district rents rising 3%. If Asia functions as a safe haven attracting investment, upside risks may emerge, with SWIREPROPERTIES (01972) expected to be a key beneficiary.

For retail, March retail sales are anticipated to show mid-to-high single-digit growth, while inbound tourist growth remains around 16%. However, competition from e-commerce remains intense. Hong Kong retail rents have stabilized, with street shop vacancy rates rising slightly by 1 percentage point quarter-on-quarter to 6.8% in the first quarter. The firm maintains a cautious outlook for retail, citing structural challenges such as mainland consumption diversion and e-commerce competition. Nonetheless, improving consumer sentiment driven by wealth effects from the property market recovery and a stronger RMB may provide support. The forecast for a 2% year-on-year increase in retail rents for 2024 remains unchanged.