Hong Kong’s mid-market property segment abuzz with deal-making: CBRE

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Property consultancy CBRE launches Value Properties sub-brand focused on the properties outside prime office and retail markets as an economic slowdown bites

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A pedestrian walks past a property agent in Hong Kong on February 28, 2024. Photo: AFP

Cheryl Arcibal

Published: 6:00am, 19 Jun 2024

Property consultancy CBRE is targeting the mid-range market in Hong Kong by creating a sub-brand called Value Properties that will address the needs of customers who seek properties outside prime markets.

The strategy is aimed at capturing a growing trend in the city’s property market, where tenants are increasingly opting for smaller spaces as Hong Kong’s economy battles sluggish demand amid elevated interest rates.

“We have seen a lot more smaller size deals, and the launch of Value Properties is to focus on this segment to expand our market share in the foreseeable future,” said Ada Fung, head of advisory and transaction services at CBRE Hong Kong. “While we have a net floor area of 88 million sq ft of grade A stock, there is another 48 million sq ft of non-grade A office stock.”

Earlier this month, the Hong Kong Monetary Authority (HKMA) left interest rates unchanged at 5.75 per cent, following the US Federal Reserve’s decision to keep its target rate in the range of 5.25 per cent to 5.5 per cent, which is the highest level in 23 years. The HKMA has followed US rate decisions in lockstep since 1983 when it pegged the local currency with the US dollar.

Ada Fung, executive director, head of advisory and transaction services, CBRE Hong Kong. Photo: Handout

In the last three years, 80 per cent of office leasing deals were for spaces less than 5,000 sq ft, according to CBRE research. No other rival property agencies with commercial divisions have a dedicated website or platform for this market segment, providing CBRE with an edge.