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Property News Weekly Digest
2018/5/12
〈Asian Post, May 12, 2018〉A policy that would impose levies on developers for long-term holding of finished flats is seeing some of them going on sale

Last week, property agent Alvin Tai brought three clients to view four flats on the 85th floor of The Cullinan luxury development near Kowloon MTR station that has been left unsold by developer Sun Hung Kai Properties for more than 10 years, in the hope of closing deals that would fetch millions of dollars in commissions.

Most agents like Tai, Hong Kong Property's point man for luxury homes in Kowloon, are excited as they could earn commissions of up to 4 per cent from selling new flats for developers, double the 2 per cent for old flats.

"Besides, the price of these new flats is 20 per cent higher than used homes in the same building," he said.

A 1,481 sq ft flat that is on the market for HK$100.66 million - a record in terms of price per square foot in this project - will bring at least HK$2 million in fees to the agent who clinches this massive deal.

SHKP still holds 30 unsold flats at the 625-unit Cullinan, according to property agents.

Across the harbour, Wheelock Properties (Hong Kong) said the remaining 17 unsold flats at its 170-unit Island Residence in Sai Wan Ho would go on sale soon.

Wheelock, however, maintained that the release was part of its planned schedule.

"We have been offering units at Island Residence for sale regularly, and [it has] no relation to the recent discussion of the vacancy tax," said Cello Chan, an assistant general manager for project marketing at Wheelock.

〈Asian Post, May 11, 2018〉Hong Kong's economy continued last year's robust growth by expanding a stronger than expected 4.7 per cent in the first quarter, thanks to the bumper stock and property markets.

But the official forecast for full-year growth stayed unchanged at 3 per cent to 4 per cent since the number for the first quarter was "rather exceptional", according to government economist Andrew Au Sik-hung.

The expansion in the city's gross domestic product during the first three months of the year was more than the estimated 3.3 per cent and 3.4 per cent rise estimated by analysts polled by theSouth China Morning Post.

"The first-quarter result was driven by rising asset prices, especially the booming property market and stock market seen last year," Au said yesterday.

"But uncertainties such as the US and China trade tensions have increased."

Francois Perrin, a portfolio manager and China team leader at East Capital, expected Hong Kong to grow at a cooler pace for the rest of the year.

Private consumption rose 8.6 per cent in the first quarter from a year ago as the unemployment rate sank to a 20-year low of 2.9 per cent, while asset prices increased.

The benchmark Hang Seng Index jumped 35 per cent last year, outperforming other major stock markets.

Secondary home prices in the city rose for 21 consecutive months till December, the longest stretch of gains since 1993.

〈The Standard, May 10, 2018〉Potential huge building costs may be why only five bids are submitted by developers for what may become most expensive piece of land in the city

The government tender for what could become the most expensive plot of residential land in Hong Kong's history has received weaker-than-expected interest from developers as soaring land prices have forced some players to the sidelines.

Five bids had been submitted for the parcel known as Kai Tak Area IF, Site 1, next to Kai Tak MTR station, on the site of Hong Kong's former airport, when the tender closed at noon yesterday, according to the Lands Department.

"The number of bids is lower than I expected. It may be because of the large investment sum needed for this site. Without taking into consideration construction cost, the site itself is already worth more than HK$20 billion," said Thomas Lam, a senior director at Knight Frank.

He had projected more than 10 developers would take part in the tender. "Developers are getting cautious," Lam said.

Hong Kong land prices had surged to very high levels, and the government's tilt towards imposing a vacancy tax would add to the uncertainties, Lam said.

Vincent Cheung Kiu-cho, a deputy managing director for Asia valuation and advisory services at Colliers International, said: "The plot definitely will smash all previous records set by residential sites sold by government tender."

He said he expected the site to yield a total gross floor area of 1.42 million sq ft worth HK$25.5 billion, or HK$18,000 per square foot, the most bullish forecast among market expectations that ranged from HK$18.1 billion to HK$25.5 billion.

〈Asian Post, May 9, 2018〉Developer Swire Properties is in talks to sell two high-end offices in the eastern area on Hong Kong Island to take advantage of a strong market for office properties, it said in a stock exchange filing yesterday.

The buildings were the 21- storey Cityplaza Three and the 24-storey Cityplaza Four in Swire's Taikoo Shing residential and commercial development in Quarry Bay, it said.

Cityplaza Three has floor areas of 18,700 to 19,300 sq ft while Cityplaza Four's floors are 23,600 to 24,300 sq ft, according to the company's website.

"Swire is constantly looking for opportunities to enhance returns for its shareholders," a spokesman said. "The office market is very robust and there has been keen market interest in en-bloc office sales recently."

Analysts see strong momentum for office leasing in Hong Kong, driven by demand from cash-rich financial and technology firms, especially those from the mainland.

Rents in the office market as a whole have risen with the eastern end of Hong Kong Island leading gains last month with a 0.6 per cent month-on-month increase, according to property firm JLL's Property Market Monitor released last month.

The relatively lower rents in these eastern areas have attracted more companies, which are finding the traditional business district of Central increasingly expensive.

Alvin Lam, a director at Midland Surveyors, estimated the average price of grade A office space in the Quarry Bay area would exceed HK$30,000 per square foot.

The planned sale by Swire follows on from what was the world's most expensive real estate transaction, the sale last year of the 73-storey The Center in Central to a consortium of Hong Kong investors and buyers from the mainland for HK$40.2 billion.

〈China Daily, May 8, 2018〉A residential building in Beijing. [Photo/IC] The high-end properties in Beijing will see a steady price increase in the second half of this year due to the decreased market supply, industry insiders said.

'Due to the government's tightening of real estate policies and the tepid market since last year, quite a number of high-end projects in the capital postponed their entry into the market, thus reducing the market supply,' said Li Xiang, a senior manager in Research and Consultancy Department of Savills, an international real estate service provider.

The demand from wealthy people to improve their living standards, however, will not be much affected, and the value of high-end residential products will continue to rise, according to Anthony McQuade, managing director of Savills for the Northern China market.

'Fundamentally, there is still a strong demand,' McQuade said. Beijing's pre-owned home market saw a rebound in inquiries and transactions in the first quarter of 2018. 'In the near future, a modest rebound might be possible,' said McQuade.

With the market stabilizing, an increasing number of high-end projects are expected to enter the market.

Shimao Group, a Hong Kong-listed property developer, for instance, is going to launch its luxury villa project 'Loong Palace' in Beijing in June.

Liu Hui, vice-president of Shimao Group, said it is the company's top project, but did not disclose the selling price.