Hong Kong Real Estate Experience – George Laning, MSRE Student

During my study abroad trip to Taipei and Hong Kong, I was fortunate enough to partake in the Colliers International company visit. This visit was eye opening and gave me a deep understanding of one of the most lucrative and exciting commercial real estate markets in the world.  Not only did I learn about the market, I learned about the daily life and career opportunities available for expatriates who wish to live, work and play in Hong Kong.

Hong Kong has a very limited amount of land and real estate. This is a very mature market with cap rates at around 2%. This translates to extremely expensive properties. This can be looked at as either a positive or a negative depending on your angle.  The downside is the buy in which can usually be classified as unaffordable by most students and even professionals coming from the US. The upside is the potential for building a lucrative long-term career within Hong Kong’s real estate industry. The scarcity of real estate in Hong Kong limits the supply and drives prices up. This increase in real estate prices has been steady for the last 20 years. As the prices continue to rise, demand for commercial real estate remains high, making Hong Kong a perceived safe haven for real estate investment. Coupled with its strong and thriving economy, investors from all over the world look to Hong Kong as a potential investment opportunity.

Although there is not a substantial amount of movement within the buy and sell side of real estate due to a low supply of newly completed commercial developments, there is a significant amount of movement in the space market where it is a landlord’s market and commercial leases are set at an average of two to three years. This means that landlords have the upper hand as they consistently raise rents with the signing of new lease contracts and lease terms. This frequent lease turnover gives global real estate service and investment management companies like Colliers an opportunity to be very active in brokering the lessor and lessee side of new lease deals. They have their feet on the ground in Hong Kong and are able to link up international investors with commercial real estate space well before it hits the market.

From the presentation we received, it seemed like there were a lot of opportunities for internships and jobs. Even though there were some restrictions and hoops to jump through to obtain a work VISA in Hong Kong, Colliers International seem more than happy to help facilitate the process for the right candidate. Since English was a first or second language for most people in Hong Kong, the idea of moving to Hong Kong didn’t seemed too farfetched. Our presenter, the Managing Director of Colliers International Hong Kong, Nigel Smith, was happy to receive resumes and discussed the viable potential for employment at the company. Had I not traveled to Hong Kong and seen it the city with my own eyes, I would have never thought to apply for an international position in Hong Kong.

Not only was this a great opportunity to network for a potential internship “adventure” in Hong Kong, it was also what could be the start of a new life. Nigel gave one the most interesting and informational presentations I have ever been privy too. Nigel had an exuberance for life and living in Hong Kong and told us about how he started and eventually decided to stay. From his stories I gained a very real understanding of life in Hong Kong which I would not have been able to simply google from my phone back in San Diego. Nigel started his career back in the early 90’s and since then has risen to the top of his career, all while finding a wife and starting a family. His recollection of the market and how it continues to change brings a level of excitement and the thought of possibilities. Living and working in one of the biggest global markets may not be for everyone, but those that stay are happily rewarded for their hard work. 

Although I don’t see Hong Kong in my near future, I have learned a great deal about the Hong Kong commercial real estate market which will translate to a better understanding of major markets and their dynamics. The fundamentals of real estate are universal and can be applied to all markets no matter how unique. I plan to use this knowledge and experience to help me understand and predict the movements of different markets in an attempt to identify opportunities for development and investment in the future.

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