HONG KONG, Feb. 1, 2016 /PRNewswire/ — RICS (Royal Institution of Chartered Surveyors) recently released its Q4 2015 Commercial Property Monitor. The Occupier Sentiment Index (OSI) of Hong Kong recorded a double-digit decline for a second consecutive quarter, at -23, signalling a declining demand in the retail market. Hong Kong retail market outlook remains grim. Retail rents are expected to fall sharply; shops in Causeway Bay and Tsim Sha Tsui will drop by 15% and 14%, respectively.
The Investment Sentiment Index (ISI) dropped from -13 to -21, showing challenging outlook in commercial real estate sentiment due to uncertainly in global macro environment and fading prospects from incoming tourism revenue. Demand in office sector will remain strong and will hold steady in industrial sector, but demand for retail property will fall significantly.
Hong Kong economy is expected to experience moderate growth due to China’s economic slowdown. Due to labour market deterioration and the negative wealth effect in mainland China, asset prices are expected to fluctuate and private consumption growth will continue to be restrained. In addition, fixed investments will suffer amid the weak business sentiment and the projected interest rate hike cycle.
RICS Hong Kong External Affairs and Public Concerns Committee Member Mr Frank Wong said, "Retail industry performance was unsatisfactory in Q4; demand and rental rate for commercial and industrial buildings remain unchanged. As the United States commenced its rate hike cycle, it affected Asia Pacific and emerging markets’ currencies stability and performance in the retail property market. Hong Kong retail industry is currently facing a challenge since high-spending mainlanders are less willing to travel to Hong Kong, and local consumers are cautious with their spending in regards to China’s slowdown."
The Global Commercial Property Monitor is a quarterly market sentiment survey. All survey respondents are commercial real estate market practitioners. The sentiment index introduced by the RICS economic department allows us to track the trend of commercial property. The full RICS report can be downloaded from rics.org/economics.
Notes to Editors:
RICS Occupier Sentiment Index (OSI): OSI is constructed by taking an unweighted average of readings for three series relating to the occupier market measured on a net balance basis; occupier demand, the level of inducements and rent expectations.
RICS Investment Sentiment Index (ISI): ISI is constructed by taking an unweighted average of readings for three series relating to the investment market measured on a net balance basis; investment enquiries, capital value expectations and the supply of distressed properties.
Net Balances: Net balance percentages, or scores, are calculated by subtracting the numbers of respondents reporting ‘down’ from the number who reported ‘up’.
Confidence through Professional Standards
RICS promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure. Our name promises the consistent delivery of standards – bringing confidence to the markets we serve.
We accredit 118,000 professionals and any individual or firm registered with RICS is subject to our quality assurance. Their expertise covers property, asset valuation, real estate management; the development of infrastructure; and the management of natural resources, such as mining, farms and woodland. From environmental assessments and building controls to negotiating land rights in an emerging economy; if our members are involved the same professional standards and ethics apply.
We believe that standards underpin effective markets. With up to seventy per cent of the world’s wealth bound up in land and real estate, our sector is vital to economic development, helping to support stable, sustainable investment and growth around the globe.
With offices covering the major political and financial centres of the world, our market presence means we are ideally placed to influence policy and embed professional standards. We work at a cross-governmental level, delivering international standards that will support a safe and vibrant marketplace in land, real estate, construction and infrastructure, for the benefit of all.
We are proud of our reputation and work hard to protect it, so clients who work with an RICS professional can have confidence in the quality and ethics of the services they receive.
About RICS Asia
RICS Asia supports a network of over 20,000 individual professionals across the Asia region with an objective to help develop the land, property and construction markets in these countries, by introducing professional standards, best practice education and training. We promote RICS and our members as the natural advisors on all property matters. We also ensure that services and career development opportunities are provided to members.
RICS Asia region serves local member associations located in Brunei, Japan, Malaysia, Singapore, Thailand, The People’s Republic of China, Hong Kong SAR, Taiwan and South Korea. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Kiribati, Laos PDR, Macao SAR, Mongolia, Nepal, North Korea, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: www.rics.org.