Ally: Expect Hong Kong commercial property to see the light at the end of the year, suggesting raising the investment immigration limit for buying commercial properties.

On June 5th, LEGEND UPSTAR (00459) held its annual shareholder meeting. After the shareholder meeting, the commercial property market analysis was released by the LEGEND UPSTAR-owned United States Business Shop, showing that the commercial property market has started to recover in the end of 2025. Due to a sharp decline in property prices last year, low interest rates, and a booming stock market, more investors entered the market. In the first five months of this year, the number of commercial property registrations has reached a new high for the first half of the year since 2023. According to the data from the United States Business Shop, the overall number of commercial property registrations in the first five months of 2025 was 1861, an increase of 39.8% compared to the same period last year. Even without considering the numbers for June, if we look at the transactions for the first half of the year, the current level has reached a new high since the first half of 2023. The total registration amount is approximately 25.311 billion Hong Kong dollars, representing a 39.7% increase year-on-year. The increase in registrations is attributed to the sharp decline in prices last year, along with the low interest rates and the booming stock market attracting investors. On the other hand, commercial property transactions have lagged behind the overall market, with 395 registrations during the period, an increase of only 6.5% year-on-year, and a total registration amount of approximately 6.467 billion Hong Kong dollars, a decrease of 26.7% year-on-year. The United States Business Shop believes that despite there being 1.1 million visitors during the May Day Golden Week, an increase of over 20% year-on-year, the temporary retail sales value in April was only 28.9 billion Hong Kong dollars, a decrease of 2.3% compared to market expectations, and a continuous decline for 14 months. With weak retail consumption and poor market conditions, it is affecting the trend of commercial properties. The United States Business Shop believes that with the lower interest rates, the return rate of commercial properties has become attractive, and they believe that the three major sectors of commercial properties will continue the trend from the first half of the year in the second half of the year, with overall transaction volume expected to continue to rise. However, due to the uncertainty of the trade war, the trends in the three major sectors may vary. The United States Business Shop emphasizes that a significant drop in commercial property prices could have a negative impact on the economy. Many seasoned investors and family offices hold a large amount of commercial properties, and if the sector continues to struggle, owners may be forced to sell at lower prices to reduce their debt ratios, leading to a serious negative wealth effect, where financial asset prices drop, resulting in reduced wealth for holders, thus suppressing consumption, affecting short-term consumption trends, and ultimately impacting economic growth, inevitably causing a shock to Hong Kong's overall economic system. The United States Business Shop suggests that the government can revitalize the economy by organizing more high-value events, trade activities, and characteristic tourism. For example, hiring more top international teams or sports stars to visit Hong Kong, inviting famous singers from China and abroad to hold concerts in Hong Kong, as well as enhancing high-value or business tourism, to attract more high-end or economically powerful overnight visitors to Hong Kong for consumption, leading to a revival in retail consumption. Additionally, they recommend the government further raise the investment cap of non-residential properties to 10 million Hong Kong dollars in the new investment immigration program, allowing applicants to meet the requirements of the investment immigration through investing in larger commercial properties.