REIT ASIAPAC MAGAZINE REITASIAPAC AUGUST 2020 ISSUE | Page 7

INTERVIEW
Q
How are Hong Kong-based investors, in
particular, American and Chinese institutions,
reacting to the uncertainty surrounding these
political tensions?
terms of the public’s view on the new legal framework. From
an expat’s point of view, it would be disappointing if access
to global media and social networks will be censored as a
result of it.
This is a rather difficult question to answer from a buyside
investment point of view. In terms of money flow, it
can be assumed that overseas investors are underwriting a
higher risk premium to Hong Kong, which results in higher
required market returns and cash outflows. The South China
Morning Post reported that Chinese investors had shown
the strongest buying support through the Stock Connect
program, acquiring US$35.7 billion of Hong Kong shares this
year, the most since 2016. There are speculations that this
strong southbound inflow is made to defend Hong Kong’s
position as a financial centre.
Q
As a foreign company with business interests in
Hong Kong, what are your plans?
I am a Swiss citizen working for a Canadian real estate
asset manager. We will continue to have our local presence
established in Hong Kong to cover South East Asia, Japan, and
Pacific without any plans for relocation for the time being.
Q
What is the effect on Hong Kong’s economy and
invest-ability should the US decide to end Hong
Kong’s special trade status, or should China rein
in further on Hong Kong’s autonomy?
I would answer this question with a focus on the potential
outcome for the investable universe in Hong Kong. I do
believe that as a consequence of the tension between the US
and China, Chinese controlled companies listed on US stock
exchanges will potentially be looking into alternative listing
opportunities. This potential shift should be beneficial for
the Hong Kong banking sector and its domestic investment
community.
Q
What is your near-term and long-term outlook
for Hong Kong’s real estate market?
Q
What is your view of the security law?
Hypothetically, what could be an end-game
scenario?
The Hong Kong economy is in an urgent need of an appropriate
stimulus to revive its GDP and decrease the unemployment
rate. Consequently, a stable business environment is
inevitable. So far, the security law seems to have an effect
on pressing the recommencement of further social unrest,
while the political views of the public will most likely remain
divided. It will be interesting to observe the outcome of the
Hong Kong legislative election in early September 2020 in
Hong Kong is experiencing one of its most severe financial
crisis for a decade after a double whammy caused by social
unrest and Covid-19. Tourism has slowed significantly since
the second half of 2019. Now, strict travel restrictions
because of Covid-19 have almost brought a complete stop to
the domestic tourism sector.
Hotel operators and landlords are suffering from recordlow
RevPAR (revenue per room) with limited domestic
demand. The retail sector is also facing pressure on higher
vacancy rates. Meanwhile, landlords might be forced to
offer reduced rent to incentivise retailers to retain their
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