Financial Secretary Paul Chan Mo-po was in Europe last week, holding talks with family offices and financial institutions in a bid to reinforce Hong Kong’s position as a world-leading hub for private capital. The visit underscores the city’s proactive approach to deepening international financial ties at a time of global economic realignment.

The timing of Chan’s trip is telling. Hong Kong now hosts more than 3,000 single family offices managing $4.5 trillion in assets — 69 percent more than Singapore and up 25 percent over the past two years, according to a recent Deloitte report. The 15th Five-Year Plan (2026-30) explicitly supports Hong Kong in consolidating and enhancing its status as an international financial center, giving Chan’s outreach added institutional weight.

Real estate remains central to family office investment strategies worldwide. The latest UBS Global Family Office Report shows real assets account for the largest allocation outside public markets. The 2026 Knight Frank Wealth Report further reveals that, for the fourth consecutive year, private capital dominates the $1 trillion commercial real estate market, significantly outpacing institutional investors. In 2025, family offices committed $464 billion to real estate — 33 percent more than the $347 billion deployed by institutions — while overall commercial real estate investment volume rose 12 percent.

Hong Kong is a key driver of this trend. Some 69 percent of respondents to the Deloitte survey indicated their wealth originated in real estate. The aggregate market capitalization of the 32 largest Hong Kong-listed real estate firms — many of them family-controlled — exceeds $126 billion. In 2025, Hong Kong capital funded $8.5 billion in commercial real estate transactions, surpassing France, which features on Chan’s current itinerary, and Japan, at $7.8 billion and $6.8 billion respectively.

European real estate is attracting growing attention from global institutional players — and Chan’s visit comes at a moment of particular opportunity for Hong Kong and Chinese mainland investors.

At the recent Qatar Economic Forum, Farhad Karim, Blackstone’s chief financial officer for private wealth, spoke positively about European investment returns, citing German Chancellor Friedrich Merz’s 1 trillion euro ($1.16 trillion) spending package. The European Union has separately committed 800 billion euros to defense under its ReArm 2030 plan, while Apollo Global Management has pledged $100 billion in Germany alone to support the country’s growth initiatives, infrastructure, and energy transition. As the world’s second-largest economy with the second-most widely used reserve currency, the Europe Union represents a market of considerable scale. Chinese exports to the region grew 12 percent in 2025.

As the world’s second-largest economy with the second-most widely used reserve currency, the Europe Union represents a market of considerable scale. Chinese exports to the region grew 12 percent in 2025

Continental European real estate offers attractive entry yields for patient investors. Core logistics and warehousing assets in select markets can yield 6 to 7 percent, while value-add and opportunistic strategies offer higher return prospects for those with more aggressive risk profiles.

Hong Kong and mainland investors may find particular appeal in European assets aligned with the Belt and Road Initiative. The 15th Five-Year Plan emphasizes high-quality development and win-win Belt and Road cooperation, including deepened engagement along key economic corridors, pivotal ports, and cross-border e-commerce networks supported by optimized overseas warehouses.

Several European markets align with these priorities. Germany is connected to China via multiple direct rail links, including COSCO-operated routes from Shandong to Hamburg, Mannheim, and Duisburg — home to the world’s largest inland port. Chinese companies have established significant clusters of warehouses and offices around these intermodal logistics hubs. Hungary, China’s “all-weather comprehensive strategic partnership for the new era”, has similarly attracted major Chinese enterprises, including BYD and CATL.

With Chan engaging European counterparts on the ground, Hong Kong capital is well-positioned to lead — identifying markets ripe for rediscovery while advancing the outward-looking priorities of the 15th Five-Year Plan.

The author is a Hong Kong-based private equity real estate investor focusing on special situation and value-add opportunities.

The views do not necessarily reflect those of China Daily.