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Property News Weekly Digest
2017/3/11
〈Asian Post, March 11, 2017〉State-backed China Resources Land (CR Land), which has been building its presence in Hong Kong for decades, has been outbid recently on two separate government land tenders by mainland rivals.

But despite hugely inflated prices now being paid in the city, chairman of CR Land's parent China Resources Group Fu Yuning - also a CPPCC member, told the Post on the sideline of the two sessions in Beijing - that its interest in acquiring more land in Hong Kong remains strong. Various local builders have been outbid on several prime land deals by Chinese developers in recent months.

Two mainland developers paid a record HK$16.86 billion late last month for a plot of residential land at Ap Lei Chau, topping market valuations by almost 50 per cent, making it Hong Kong's most expensive lump-sum sale to date.

The buyer is a joint venture between Logan Property Holdings of Shenzhen and Guangzhou-based KWG Property Holding.The Hong Kong market has unique strengths, particularly given it is a free economy. It is particularly attractive to mainland capitalFu Yuning, chairman, CR Land's parent China Resources GroupWith a total gross floor area of 762,091 square feet, that price translates into HK$22,118 per square foot. Property agents expect apartments on the site to sell for at least HK$32,000 per square foot, a record for the district. Fu said he felt prices have become "too expensive", but that it was still too early to say they are nearing their peak.

"The Hong Kong market has unique strengths, particularly given it is a free economy. It is particularly attractive to mainland capital," Fu said, adding CR Land - which listed on the Hong Kong stock exchange in 1996 - will continue to make moves, but will only pay what it considers reasonable.

CR Land was one of the 15 developers who submitted bids on a government tender - which closed at midday yesterday- for the latest residential land parcel in Kai Tak, the site of the old Hong Kong airport. Surveyors are projecting the site - Kai Tak Area 1L Site 2 - could fetch between HK$6.1 billion to HK$7.4 billion, or HK$10,000 to HK$13,500 per square foot.

〈China Daily, March 10, 2017〉Chinese mainland property developers have been massively expanding their business in Hong Kong in recent years, turning into another strong investment force in the Hong Kong land market, and the trend is expected to continue .Analysts believe developers eager to purchase at coming major land sales

Chinese mainland property developers have been massively expanding their business in Hong Kong in recent years, turning into another strong investment force in the Hong Kong land market, and the trend is expected to continue, according to analysts. Henry Mok, regional director of Capital Markets at real estate services firm Jones Lang LaSalle, said in the coming two to three months there will be more major land bids and mainland developers will be eager to buy, adding that 'the previous cases are just a start' and 2017 will still be the year of mainland buyers, in terms of the residential land market.

Within one week last month, two residential land parcels in Hong Kong were successfully bid by mainland developers.

One is MTR Corporation residential plots, next to Wong Chuk Hang station on the South Island Line in Hong Kong, which were successfully bought by Ping An Real Estate Capital, a unit of Ping An Insurance, which teamed up with Road King Infrastructure, outbidding 13 Hong Kong developers.

In addition, Logan Property, together with KWG Property, bought high-end residential land at Ap Lei Chau for HK$ 16.85 billion ($2.17 billion), the highest price in recent years in terms of the deal price for one single plot of land.

According to the CRIC real estate research center, since 2011, mainland companies have been buying Hong Kong residential land, including China Overseas Land and Investment, Vanke, Poly Property Group, Shimao Property, Mingfa Group, China Metallurgical Group, China Minmetals, and HNA Group. And the investment reached HK$ 76.4 billion with a total of 23 deals so far, most of which were in the past two years.

〈China Daily, March 10, 2017〉Beijing was listed as the billionaire capital of the world for the second year running, ahead of New York, Hong Kong and Shenzhen, according to the latest findings Hurun Global Rich List 2017, which was released on March 7.

Beijing was listed as the billionaire capital of the world for the second year running, ahead of New York, Hong Kong and Shenzhen, according to the latest findings Hurun Global Rich List 2017, which was released on March 7.

Bill Gates was listed as the richest man in the world with a net wealth of $81 billion, and Warren Buffett remained in second place with $78 billion. Jeff Bezos, founder and CEO of Amazon.com Inc, reached the top three for the first time, as his wealth surged 37 percent to $72 billion.

The total number of Chinese billionaires exceeded that of the United States for the second year running. China and the US, with 609 and 552 respective billionaires, accounted for half of the billionaires worldwide, the report said.

Globally, the logistics and retail sectors performed the best, gaining 15 percent and 13 percent respectively, in number of billionaires.

Germany had the third-largest number of billionaires this year, surpassing India. The United Arab Emirates and Indonesia broke into the top 20 for the first time.

'Shenzhen and Hong Kong now have one of the highest concentrations of wealth in the world, ahead of even California, the state with the most billionaires in the US,' says Rupert Hoogewerf, chairman and chief researcher of the Hurun Report.'Global wealth is being concentrated in the hands of the billionaires at a rate far exceeding global growth,' Hoogewerf says.

〈Macau Daily, March 9, 2017〉Railway operator MTR Corporation Ltd. saw its profit slip 21 per cent year-on-year in 2016 as the group underwent an 89 per cent drop in its property development business, according to a company filing with the Hong Kong Stock Exchange.

The group’s total profit for the year hit HK$10.25 billion (US$1.3 billion) during last year, as opposed to HK$12.99 billion in 2015, while its property development business plunged to HK$311 million in profit from HK$2.89 billion the previous year.

Despite the company being granted a two-year contract for the provision of management and technical assistance services on the MSAR’s light rail transit (LRT) system worth MOP474.3 million, the company makes no mention of the project, or Macau, in the filing, while reporting on projects in the UK, Sweden, Australia and China.

Overall revenue for the period increased by 8.4 per cent to HK$45.19 billion, with the group recording growth ‘in all business segments,’ according to the filing.

“In Hong Kong many of our businesses have a degree of resilience against an economic slowdown,” notes group CEO Lincoln Leong Kwok-kuen, pointing out that “profits from Hong Kong property development were muted in 2016 and will remain so in 2017 as we will have no new developments scheduled for completion in the year.”

〈The Standard, March 8, 2017〉Amid mainland developers' bullish sentiment in Hong Kong's property market, CIFI Group (0884) expects to see 10 percent of its investments made in the SAR, company chairman Lin Zhong told a press conference yesterday.

Early in January, the Shanghai-based developer acquired a project on Chung Hom Kok Road, between Repulse Bay and Stanley, from local conglomerate Shun Tak Group for HK$1.59 billion - marking CIFI Group's first foray into the SAR luxury property market.

Lin said there will be one or two more cooperation projects to be launched in Hong Kong this year, although he did not disclose details.

For 2016, CIFI saw a 28 percent increase in its core net profit to 2.82 billion yuan (HK$3.17 billion) following strong sales in the first three quarters.

The group's contracted sales jumped 75 percent to 53 billion yuan, and gross floor area sold under contracts climbed 42 percent due to the increase in sales in first and second tier mainland cities.

The contracted average selling price rose 23.7 percent to 18,175 yuan per square meter year-on-year.

As Lin sees little chance for top tier cities in China to relax home-purchase restrictions this year, he said the group may accelerate diversification into acquiring more commercial buildings, apartment blocks, and hotels.