According to Zhitong Finance APP, Li Weiweng, Chief Executive Officer of Savills Greater China, recently discussed the Hong Kong real estate market, noting that over the past 40 years, the Hong Kong property market has rebounded after multiple crises including financial storms, with a long-term overall upward trend. He acknowledged that this round of market adjustment has been deep in magnitude and broad in scope, but it represents a reasonable correction, and the long-term outlook for Hong Kong's property market remains clear.
Li Weiweng expects that Hong Kong's property market consolidation phase may continue until 2028, with a return to a relatively healthy level expected by 2030. He pointed out that the government has introduced multiple supportive policies, among which the measure to relax restrictions on converting office buildings into student dormitories is particularly noteworthy. Currently, international capital from Malaysia, Singapore, and other regions is continuously flowing into the Hong Kong market, driven on one hand by optimism about the allocation window created by the market correction, while overseas investors possess the ability to bear foreign exchange risk, combined with attractive lending rates offered by banks, further boosting foreign capital deployment into Hong Kong real estate.
Breaking down by sector, Li Weiweng stated that the office market downturn had been anticipated before the pandemic, and rents are currently in an adjustment cycle; the retail property market remains the main pain point, affected by multiple structural factors including heavy household burdens for local Hong Kong families, constrained consumer spending power, and the external environment, with recovery still requiring time. In his view, student housing will become a brand-new market opportunity, as this sector can drive surrounding consumption and gradually stimulate overall improvement in the real estate market, and he called for the market to remain patient.
Regarding external disruptions caused by U.S. interest rate hikes, he noted that the impact of rate hikes is global in nature, and Hong Kong's property market has already completed a round of correction, whereas some other regional markets may have just entered their adjustment cycle.
The recent market focus on the receiver sale transactions of the Sheraton Hong Kong Tung Chung Hotel and Four Points by Sheraton Hong Kong Tung Chung, which was ultimately sold for HK$2.7 billion, representing a discount of over 50% compared to the original developer's construction cost. As the agent responsible for the project's sale, Li Weiweng believes that although the transaction price shows a significant discount to cost, the project's operational condition is good, with an estimated return rate of 4.5%, which is within a reasonable range.
Turning to the company's own operations, Li Weiweng mentioned that in the face of property market cycle shifts, Savills has undertaken an organized business layout, with non-agency business now accounting for nearly half of overall business, of which property management is an important component, and operations remain stable. He added that the company's ability to undertake property management work for government projects such as the new Huanggang Port and the Hong Kong-Zhuhai-Macao Bridge also reflects official recognition of the company's service capabilities.