Savills Investment achieved a record setting year in 2007 with transactions in excess of HK$24 billion, said Raymond Lee, Managing Director of Savills Hong Kong.
Savills Investment achieved a record setting year in 2007 with transactions in excess of HK$24 billion, said Raymond Lee, Managing Director of Savills Hong Kong. The market share for transactions worth HK$1 billion also reached 60 per cent, a figure that also leads the market. With rising inflation and the emergence of negative interest rate, coupled with the continual appreciation of RMB and a weak US Dollar, he expects investors will continue to have interest in Hong Kong properties and remain positive for the market. He foresees commission income this year will increase 10 per cent to 20 per cent.
In 2007, the record setting total of HK$24 billion the Investment Department achieved was HK$12.5 billion or 110 per cent more than that of 2006. When compared to 1997, the Department did even better, increasing to 150 per cent. Out of those major transactions, 40 transactions involved whole blocks of property, 25 per cent higher than that in 2006.
Peter Yuen, Senior director and Head of Investment and Sales (HK & Macao) said, in terms of strata-title offices, retail shops and whole block transactions worth HK$100 million or more, the increase in proportion of major transactions done by Savills is even more prominent. In terms of the number of transactions, there were 52 in 2007, up 80 per cent from 29 in 2006.
Comparing these figures with the rest of the market, it is even more clear from the percentage increases, the achievements by Savills was far greater. In 2007, the market recorded 247 transactions for this category, up 50 per cent from 165 in 2006.
Peter also noted that for those major transactions completed by Savills, the spread between foreign funds and local investors was around 25 per cent and 75 per cent respectively.
Out of all these categories of major transactions, said Raymond Lee, Savills takes the lead in those worth at least HK$1 billion. In terms of number of transactions, there were 12 recorded in the market and out of those a total of 7 were concluded by Savills, with a market share of 60 per cent. In terms of total transaction amount, the market recorded a total of HK$16.78 billion, out of which HK$9.94 billion were done by Savills for a market share of 60 per cent also.
Of note, in 2006, Savills did not conclude any deals worth HK$1 billion at all. Therefore, the Investment Department really demonstrated an extraordinary performance in 2007, said Raymond Lee. Out of these 12 transactions worth HK$1 billion, 4 involved residential properties, one on land, 3 on office buildings, 2 on industrial buildings, and 2 on hotels.
To conclude, Raymond Lee said that although the global market is affected by the US sub-prime mortgage crisis, leading to fluctuations and corrections of the stock market since the start of 2008, the investment sentiment is still positive, especially in the Asian market. The economy is booming and inflation will lead to the emergence of negative interest rate. This will prompt investors to turn to the property market as an asset harbour. Moreover, with RMB appreciation and a weakened US dollar, properties in Hong Kong will appear to be much cheaper. Therefore, Raymond Lee is still positive about the investment market this year. While there are fewer and fewer properties with high potentials, he expects that the number of transactions can be maintained around the 2007 levels. He also expects that the commission income to increase 10 per cent to 20 per cent in 2008.