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Property News Weekly Digest
2017/10/21
〈Asian Post, October 21, 2017〉Tycoon Walter Kwok Ping-sheung yesterday became the third Hong Kong developer to support the government's push for private property giants to use some of their land for affordable housing for first-time buyers.

However, Kwok, the chairman of Empire Group Holdings, also called for the right incentives for developers to take part, though he did not go into details.

"It can be a win-win solution for everybody, and we can see Singapore … has been very successful in helping people to buy their own homes," Kwok said.

In recent months, Wheelock, Hang Lung and Sun Hung Kai Properties (SHKP), which was formerly chaired by Kwok and now headed by his younger brother Raymond Kwok Ping-luen, backed the government plan to collaborate with developers to boost home ownership.

Hong Kong has the dubious distinction of being the costliest city in the world to own a home. Chief Executive Carrie Lam Cheng Yuet-ngor, in her maiden policy address last week, proposed the Starter Homes scheme for first-time home buyers who do not qualify for subsidised government housing but cannot afford private flats.

A pilot project for the scheme on Anderson Road in East Kowloon is expected to provide 1,000 flats, built by private developers but with the government ensuring that prices are affordable.

Lam said land supply for the scheme would have to "come from sites already owned by private developers or to be bought from the government", though an official said yesterday that a task force would consider other options to build up the city's land bank, such as reclaiming land and constructing homes above the Kwai Tsing container terminals.

〈China Daily , October 20, 2017〉As HK’s housing prices continue to scale new heights, young people aiming to own a home are looking to the government to help them realize their dreams. Luo Weiteng reports.

If the ever-growing army of Hong Kong people, who have lost all hope of owning a roof over their heads, want some solace, they may have well found some comfort in a strong adherent, who firmly believes that owning a home isn’t everything in life.

To many of them, the words “home ownership” may have long vanished from their vocabulary, with no end in sight to the city’s skyrocketing property prices that have now catapulted far beyond their reach.

Steven Lam Hoi-yuen — one of the city’s budding young entrepreneurs who co-founded local logistics startup GoGoVan, which went on to become Hong Kong’s first $1-billion “unicorn” through a merger with Chinese mainland freight group 58 Suyun — was, apparently, stunned to find that the prevailing mentality of owning an apartment in Hong Kong does take ample precedence over a feat like his in getting a multi-billion-dollar business rolling.

At a recent press conference announcing the merger, the thirty-something entrepreneur was bombarded with questions from reporters like “when will you use your new-found wealth to buy a flat” — a query that continues to hang like the “sword of Damocles” over the heads of many ordinary folks in the region.

Rubbishing the perception that owning a house is the first and foremost testimony to success in life, Lam blatantly shot it down, telling the city’s young people to “aim high and dream big” to succeed in life rather than pressing themselves against the wall in what could be a futile pursuit of a home.

〈Asian Post, October 20, 2017〉Singapore SHARES of Sapphire Corp rose on Thursday after it announced on Wednesday night that two of its largest shareholders are selling a 27.96 per cent stake in the company to Hong Kong-listed Hong Kong International Construction Investment Management Group (HKICIM) in a share swap that values the shares of the investment management firm at 51 Singapore cents apiece.

The stock closed at S$0.315, up one Singapore cent from the previous close. Sapphire is an investment management and holding company mainly engaged in the rail and infrastructure engineering, procurement and construction business. HKICIM is mainly engaged in the business of property development, foundation piling and site investigation in Hong Kong, as well as property investment and management.

HKICIM will allot a maximum of 24.9 million and 40.5 million ordinary shares to the two Sapphire shareholders Best Feast and Ou Rui, respectively, at HK$4.08 each. The number of consideration shares is subjected to adjustments on the group's audited net profit for the 12 months ending June 30, 2018, being no less than 64.75 million yuan (S$13.27 million), the company said. Sale consideration payable to Best Feast and Ou Rui are HK$101.47 million (S$17.62 million) and HK$165.43 million, respectively.

Upon completion of the transaction, Best Feast's interests in the company will be reduced to 56,500,400 shares or 17.33 per cent of existing share capital. Ou Rui, which is incorporated in Hong Kong, will cease to be a shareholder of Sapphire. Following the acquisition, HKICIM will emerge as the substantial shareholder with an estimated 91.2 million shares or 28 per cent of the firm's current issued capital base of 326.1 million shares as at Oct 19.

〈The Standard , October 19, 2017〉CITIC Pacific, a subsidiary of Chinese conglomerate CITIC Ltd (0267), is to launch its residential project Kadooria in Ho Man Tin this week, with five show flats to be made available this month.

CITIC said its latest project will provide 77 units, ranging from 1,267 saleable square foot two-bedroom homes, to 3,200 sq-ft four-bedroom units.

Last year, the group acquired a site in Ma On Shan for HK$1.47 billion, or about HK$6,500 per sq ft in terms of gross floor area. Pre-sales are expected in 2019.

Meanwhile, Henderson Land's (0012) Novum East project in Quarry Bay will put 93 flats - mostly two- bedroom homes - on the market this weekend.

Novum East will provide 464 units ranging in size from 193 to 451 ssf in one single building. Construction of the project is expected to be completed in April 2019.

In the secondary market, a 1,300 ssf flat at South Bay Garden in Repulse Bay sold for HK$32 million, or about HK$26,700 per ssf - HK$1 million below the asking price of HK$33 million.

The vendor bought this three- bedroom home for HK$13.5 million in 2007, said Ricacorp Properties. The recent sale was the second deal recorded at the estate since October last year.

In Tseung Kwan O, a 648 ssf three- bedroom flat in The Wings changed hands for HK$10.88 million, or HK$16,790 per ssf, said Hong Kong Property. In 2013, the seller paid HK$7.88 million, or HK$12,160 per ssf, for the unit.

〈The Standard , October 19, 2017〉More investors are expanding their portfolios and own businesses in core districts - including in low-key shopping centers - as the SAR's retail market has rebounded in recent months.

Some investors have splashed out up to HK$500,000 a year to snap up leases on more than 10 small shop units at The Cube in Tsuen Wan.

There, the investors either keep the retail spaces for self-use, or rent them out to other small business operators, who in turn can offer consumer goods such as household products at discounts of 10-20 percent because of their cheap shop rents.

Property agents said some landlords tend to subdivide their mall units in order to attract tenants. However, despite the improving sentiment in the retail market, owners of some subdivided units still suffer losses when selling their units. For example, an owner of a unit at T.Mark mall in Tsuen Wan sold it in late July for HK$300,000 - more than 90 percent less than his HK$4 million purchase price in 2012.

Meanwhile, a subdivided shop site owner sold his property at Tsim Sha Tsui's CKE Shopping Mall for 35 percent less than what he paid in 2013.

Nonetheless, investors are seizing the opportunity to lease out multiple shop sites at those malls with low occupancy.