MAINLAND investors are scouring Hong Kong’s commercial property market for bargains after prices plunged 30 percent, signalling a new wave of demand.

Property agents expect the influx of mainland capital, which has helped Hong Kong become one of the world’s most expensive property markets, can once again prop up the sector as the country recovers from the COVID-19 pandemic and stands ready to deploy liquidity.

In August alone, mainland buyers snapped up at least two office towers and one hotel building worth HK$4 billion (US$516 million) in total, according to agents and filings.

“A majority of recent large-value building deals were bought by mainland investors. Their number has really grown in the third quarter,” said Reeves Yan, head of capital markets at CBRE Hong Kong.

“They’re looking for bargains ... and they’re confident in Hong Kong in the long term.”

“We expect to see more mainland investors coming to buy land,” said Dennis Cheng, senior sales director at Ricacorp (C.I.R.) Properties.

“If Hong Kong gets more stable in the next few months ... we expect more mainland companies to open branches here, and that will help the office sector to recover.”

The move by mainland investors is in stark contrast to foreign investors. “Foreign investors are still absent. I spoke to two foreign funds recently who said they won’t consider Hong Kong at the moment,” said Daniel Wong, CEO of Midland IC&I.

Mainland investment accounted of 39 percent of total commercial real estate transactions in Hong Kong so far this year, up from 19 percent for the whole of 2019, Colliers said.

(SD-Agencies)