During the second quarter of 2013, Hong Kong reported a 53 percent drop in direct commercial property investment transactions from the previous quarter, as the region begins to show the impact from restrictive cooling measures.
Transactions for the Hong Kong market were down 49 percent from the previous year, according to the latest number from Jones Lang LaSalle. Cross-border deals fell 71 percent during the first half of 2013 compared to the same period last year.
The government has introduced several measures in the past year to cool the market, including doubling the stamp duty on commercial transaction in an effort to cool the market, and they are clearly starting to have an effect.
The existing activity for Hong Kong is supported by companies looking to occupy space with investor interest for new developments in emerging office market locations, JLL reports. Hong Kong remains the most expensive office market in the world according to a recent report from CRBE.
"Capital from around the region continues to show a bias towards core assets; however we are seeing some evidence of a shift towards more opportunistic investment," Dr Megan Walters, head of research for Asia Pacific capital markets at JLL, said in a report.
Overall, direct commercial real estate investment in Asia Pacific reached $59.7 billion during the first half of the year, 21 percent higher than last year and exceeding market expectations, JLL says. Transaction volumes reached $32.6 billion in the second quarter, 21 percent higher than the previous quarter. Japan accounted for $20.8 billion of transaction volumes during the first half, a 50 percent increase over a year ago.