Worsening economic conditions coupled with the COVID-19 outbreak impacted trading activity in Q1 2020, with aggregate trade value falling by 10.6% y-o-y in the first two months of the year, increasing the likelihood of a fifth consecutive quarterly decline.
Hong Kong’s re-exports from China slid by 10.7% y-o-y in Q4 2019 and fell by 8.2% y-o-y in 2019. The decline accelerated to 21.5% y-o-y in the first two months of 2020, reflecting the suspension of business activity in China.
Leasing momentum weakened over the quarter, with occupiers observed to be seeking cost-saving options in anticipation of weaker short-to-medium demand.
Relatively strong sources of leasing activity during the quarter included the electronics industry, particularly firms involved in sectors related to 5G development.
Demand for redevelopment projects remained firm in spite of the weak market conditions. Four industrial buildings changed hands this quarter.