According to Savills, Hong Kong residential landlords are receiving backing from hedge fund investors and cryptocurrency professionals since conventional sources continue to be slow.
Hong Kong’s residential landlords
are getting assistance from individuals employed by
hedge funds
and
cryptocurrency firms
As conventional sources continue to lag behind, property consultancy Savills Hong Kong stated in a research report released on Wednesday.
The company stated that repatriated individuals arrived in the city from Singapore during the initial three months of the year; however, there was little action within the key upscale districts, keeping the market relatively calm.
The leasing activities were primarily concentrated in the lower rental segments in Kowloon, as mentioned, fueled by an increase in talents migrating from Mainland China.
“Besides local talent, expats and people from mainland China who work in hedge funds and cryptocurrencies have lately boosted the demand for rentals, showcasing varied housing preferences,” stated Jack Tong, the head of Savills Research & Consultancy.
Many of these renters have profited from cryptocurrency trading, the firm said, adding that they generally seek new flats in Kowloon with established surrounding mainland communities or opt for short-term accommodation.
In the fourth quarter, residential rents for luxury flats in Kowloon rose 3.9 per cent from the third period, compared with a decrease of 0.2 per cent in Hong Kong Island, according to Savills residential rental indices.
Several significant deals during the final quarter involved a 1,478 square foot apartment at The Austin in West Kowloon, leased out for approximately HK$75,500 (US$9,708) per month.
Johnny Ng Kit-chong, a member of the Hong Kong Legislative Council and technology entrepreneur, noted that following a governmental initiative implemented in October 2022, the virtual asset sector has experienced rapid growth. As a result, this development has facilitated the incorporation of cryptocurrency exchanges, blockchain platforms, and stablecoin issuers.
According to the Securities and Futures Commission’s website, there are 10 virtual asset trading platforms that have secured licenses in Hong Kong. This year saw three additional approvals, among which is the New York-based Bullish, marking the first time an international cryptocurrency exchange has been granted approval by Hong Kong authorities.
Ng mentioned that exchanges might require additional space as they employ more staff members dedicated to cryptocurrencies or blockchain technology. He further approximated that over 1,000 firms in this industry have relocated to Hong Kong since 2022.
“Things look hopeful,” Ng stated.
Furthermore, Savills has noted significant leasing activities connected to the hedge fund industry.
Point72 Asset Management, led by renowned investor Steven A. Cohen, took up four floors at The Henderson in Central. Meanwhile, the New York-based quant trading company Jane Street extended its presence into the 1.5 floors formerly used by Point72 within Chater House.
According to Savills, expatriates from the U.S. and Europe have been reassigned to new positions to capitalize on market fluctuations in Hong Kong, mainland China, and Japan over recent years. These individuals typically choose to reside in more modern apartments on Hong Kong Island, with their monthly rent falling between HK$60,000 and HK$80,000.
Moreover, according to Savills, several high-level executives have moved to Hong Kong along with their families, looking for housing within a monthly budget range of HK$100,000 to HK$200,000. These individuals usually look for homes or apartments located either on The Peak or in the Mid-Levels area, which offer living areas exceeding 2,000 square feet.
A property spanning 5,043 square feet located at Nos. 54-58 Mount Kellet Road on The Peak was reportedly leased out for HK$420,000 per month.
In the final quarter, the serviced apartment market saw interest from businesspeople originating from mainland China. According to Savills, these individuals favored the adaptable leasing options provided by such accommodations.
Several individuals expressed readiness to allocate over HK$100,000 each month to rent prime spots like the Four Seasons and Rosewood for durations ranging from three to six months. This was due to their regular business trips to China and various parts of Asia, according to reports.
Tong stated that moving forward, we might see an increase in expats coming back from Singapore in the initial part of this year. These people had departed from Hong Kong about three years prior; however, some could be thinking about their return due to emerging business prospects and a comparatively reduced cost of living, notably since rental prices for residences in Singapore have climbed more than 30 percent over this timeframe.
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