The COVID-19 outbreak, residual impact from sociopolitical unrest and external economic and geopolitical headwinds may point to a challenging 2020 for Hong Kong but there is hope on the horizon for the region's commercial real estate market, CBRE says.

The real estate firm released its Greater China Real Estate Market Outlook 2020 on Thursday, forecasting a gradual stabilisation of the Hong Kong economy in the second half of the year.

CBRE Managing Director for The Greater Bay Area & Hong Kong, Tom Gaffney, said this would allow the "relatively resilient" commercial market to "walk out of the shadows".

CBRE Greater China Real Estate Market Outlook 2020 - At a glance:

• Hong Kong's commercial real estate market remains relatively resilient as the economy is expected to stabilise gradually in H2 2020.
• CBRE predicts transaction volume to fall noticeably in H1 2020 in Hong Kong’s investment market and will pick up gradually when the COVID-19 outbreak fades. 
• The industrial market continues to be Hong Kong's most resilient commercial real estate sector, with warehouse rents supported by low vacancy, limited new supply and demand from relocating occupiers.

“With the global, China and local economies all facing strong headwinds, corporates and businesses may elect to stay cautious in 2020. However, should the COVID-19 outbreak be contained by the end of Q1-2, business momentum will likely pick up in H2 2020,” he said.

According to the report, the industrial market continues to be Hong Kong's most resilient commercial real estate sector, with warehouse rents supported by low vacancy, limited new supply and demand from relocating occupiers.

CBRE Managing Director for The Greater Bay Area & Hong Kong, Tom Gaffney. Source: CBRE

CBRE predicts transaction volume to fall noticeably in H1 2020 in Hong Kong’s investment market and will pick up gradually when the COVID-19 outbreak fades.

Head of Research for The Greater Bay Area & Hong Kong, Marcos Chan said an improvement in economic momentum after mid-year could lead to a strong rebound in investment demand for H2 2020, with solid interest for industrial properties in value-added deals.

"In Hong Kong, financial markets remain resilient despite a complex economic outlook," he said.

"Interest rates are expected to stay low for longer. Combined with ample liquidity and the low-base effect, overall investment demand is forecast to increase relatively from 2019."

Click here to download the report.

Similar to this: 

CBRE Hong Kong Property Management Partners with Negawatt Utility to 'optimize efficiency'

CBRE appoints Reeves Yan as Head of Capital Markets in Hong Kong

CBRE Forum Hong Kong 2019 connects real estate developers, investors and occupiers for a sustainable future