An expected 0.25 percentage point rate increase by the US Federal Reserve in December is unlikely to dampen Hong Kong family offices’ interest in European, US and Japanese property investments, according to industry insiders.

Ken Peng, chief investment officer at Raffles Family Office, said there were currently no signs of a large-scale sell-off in the US real estate market, with some local markets in the US even seeing supply shortages.

“I believe the Federal Reserve’s current rate-hiking cycle could be quite short,” Peng said. “Following the midterm elections, control of the House of Representatives and Senate could shift. Fiscal policy might tighten by 2027. This would slow US economic growth and ease inflationary pressures.”That meant there would likely be no further interest-rate increases thereafter and through 2027, Peng added.

Thomas Chak, head of capital markets and investment services at Colliers, said global capital was increasingly favouring assets with higher returns as interest rates go up, leading to a general reduction in real estate holdings.

“Single-family offices for some of Hong Kong’s prominent families primarily focus on equity investments in real estate and holdings in high-dividend real estate investment trusts,” he added.

“Alternatively, they may use the family office structure to hold properties – often acquired long ago at low costs – for rental income.”When it comes to selecting locations and property types for overseas investments, Chak said Hong Kong-based family offices typically favoured markets they were familiar with – and stuck to the core principle of avoiding excessive risk exposure to any single market.

Daniel Billig, senior director of international capital at JLL in Hong Kong, pointed out that most Hong Kong family offices did not tend to hold local real estate within their portfolios.

“Historically Hong Kong family offices have favoured investing into global gateway markets – especially those in Europe and the US,” he said. “Within Asia-Pacific, they have typically favoured Japan, Australia and New Zealand.”Hong Kong families are very well travelled and global, according to Billig, so they often gravitate to trophy opportunities in major cities where they have spent time living, working or on holiday.

Peng from Raffles Family Office said Hong Kong families with a background in real estate were generally better equipped to evaluate projects involving direct ownership, renovation or redevelopment.

“Conversely, families that prioritise stable income and a reduced management burden may prefer mature, income-generating assets or investments made through funds,” he added. “These differences often explain their asset choices more effectively than geography.”

While an interest-rate increase would only have a minimal impact in the short term, sustained higher interest rates could pressure the market and overleveraged owners, according to Tung Ho-Pin, director and head of private office at Knight Frank.

Looking ahead, analysts expect that Japan’s real estate market will be the most sought after by Hong Kong family offices.

“We’ve already seen plenty of Hong Kong capital flock to Japan recently, particularly within the hotels and hospitality sector,” said Billig from JLL. “We are also forecasting significant growth in Tokyo’s office sector.”

Another area that appeals to Hong Kong family offices involves distressed assets in the city, as well as projects being converted into student housing or long-term rental apartments, according to Peng at Raffles Family Office.

Knight Frank also highlighted Hong Kong’s repriced hospitality assets for student housing conversions – driven by structural shortages, strong growth in rents and the opportunity to lock in cash flows nine months to a year ahead – alongside deeply discounted prime offices.

“Family offices and ultra-high-net-worth investors accounted for 16 per cent of total commercial transactions year-to-date, up sharply from 9 per cent in 2025,” said Esther Liu, director and head of research and consultancy at Knight Frank.

“Hotel deal volume reached HK$11.3 billion (US$1.4 billion) year-to-date – almost double 2025’s full-year [total of] HK$6.3 billion,” she added. “Family offices and private capital represent 24 per cent of transactions in hotels and student accommodation.”