Hong Kong’s proposed anti-sanctions law is putting pressure on the city’s property market as foreign companies grow wary of risks, according to one of the biggest agents.
“They have to reconsider the law’s impacts on Hong Kong,” Tony Lo, chief executive officer at property agency Midland IC&I Ltd., said in a press conference Wednesday. “They may redistribute assets, sell their properties and relocate their office somewhere else.”
Foreign companies accounted for 21 percent of the large commercial property transactions in Hong Kong since the start of the year, reaching more than HK$10 billion ($1.3 billion), according to data from Midland. They’ve become the second-largest group of investors after local participants, surpassing even mainland Chinese businesses.
The property agency expects foreign investors to slow their investments in Hong Kong in the second half, due to concerns about the proposed law. Overseas real estate funds could also slow down their pace after a slew of acquisitions earlier this year, Lo added.
Even though China’s top legislative body postponed a vote on a proposal to impose an anti-sanctions law on Hong Kong last week, the public still sees the legislation as imminent.
China passed its anti-sanctions law in June to retaliate against the U.S. It gives the government broad powers to seize assets from entities that are “directly or indirectly involved in the formulation, decision or implementation” of foreign sanctions.
China needs to add the law to Hong Kong’s charter for it to take effect locally. – Bloomberg