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Property News Weekly Digest
2021/11/6
〈China Daily, Nov 6, 2021〉Henderson to deliver 'an iconic landmark'

Company dismisses fears over dividend payment and says it does not face financial pressure in developing prime harbourfront site in Central

Henderson Land Development said it has deep pockets to develop a prime harbourfront site in Central into an iconic landmark.

The city's third-largest developer by market value on Wednesday won the bid for the 50-year land grant of New Central Harbourfront Commercial Site 3 for a record HK$50.8 billion, beating five contenders in the government's "two-envelope" tender.

"We would sign the cheque immediately if we were asked to pay HK$50.8 billion tomorrow. It is not a problem," Colin Lam Ko-yin, vice-chairman of Henderson, said at a briefing yesterday to discuss the company's plans for the site.

"We do not have any [financial] pressure and [the land purchase] won't affect our dividend payment."

Lam said Henderson was open to discussions with other parties interested in developing the project together.

The company plans to invest HK$63 billion to develop the site into an iconic landmark and a "social destination dedicated to public enjoyment".

〈The Standard, Nov 5, 2021〉Henderson Land (0012) said it will remain financially sound even after settling the HK$50.8 billion land price for a prime Central Harbourfront site.

Shares of the developer dropped 3 percent yesterday after the announcement of the total investment of HK$63 billion, the biggest outlay ever for a project in Hong Kong.

Its current gearing is only 20 percent as of end-July, and it will only be 30 percent after borrowing for the site, executive director and vice-chairman Colin Lam Ko-yin said yesterday in a virtual meeting.

But he added that Henderson does not rule out collaborating with other interested developers in the three-tower-block project.

The group enjoys stable rental incomes, dividends and revenues from property sales with a strong cash flow, Lam said, and it can settle the land premium in a short time without raising more funds from a share placement. To that end, the developer has no intention to change its dividend policy, Lam said.

The average rental prices for office buildings and shops in the Central stand at HK$130 to HK$190, suggesting a rental yield range of 4 percent to nearly 6 percent for the 516,300-square-foot Site 3, Lam said.

〈Asian Post, Nov 4, 2021〉More people preferred renting a home to buying one in September and October, which is usually the off-season for the home rental market in Hong Kong, transaction records for 20 large housing estates show.

Hong Kong's private home price index still stood at a higher level of 396.3 points in September, which was only a 0.48 percent decline from July's record high, despite falling for a second consecutive month, latest data published by the Rating and Valuation Department showed.

The rental index climbed for a seventh month in September to 183.8, up 0.88 percent from a month ago.

Some industry insiders said that many potential buyers adopted a "wait-and-see" attitude as they believed the property market would cool down soon.

So they opted for short-term rentals temporarily, which boosted the leasing market.

To Kwa Wan in recent months has seen an increasing number of home hunters who turned to the rental market, bringing a 20 percent rise compared with the summer holidays due to the rise in home prices, said an agent at Chase Property Agency.

〈The Standard, Nov 3, 2021〉Property developers in China looking to raise badly needed cash by selling assets are finding it hard to strike deals, as potential buyers in the sector hoard funds after home sales plunged and Beijing stepped up its borrowing crackdown.

China Evergrande Group last month ended discussions to sell a controlling stake in its property-management business that would have raised about US$2.6 billion (HK$20.28 billion).

A plan to unload a trophy office tower in Hong Kong also stumbled, while Modern Land China defaulted on a US$250 million bond after it was unable to sell some assets. Oceanwide Holdings is seeking to offload its main office complex in Beijing after a unit defaulted.

The failure to sell holdings exacerbates the cash squeeze for some of the nation's property giants, many of which are shut out of financial markets due to soaring borrowing costs and Beijing's "three red lines" policy that limits lending in the industry.

"The majority of prospective buyers of real estate assets are also developers, but under three red lines debt restrictions, many refrain from swallowing sizeable assets," said Matthew Chow, a director at S&P Global Ratings. "In a down cycle, even those developers with abundant liquidity tend to hoard cash."

〈China Daily, Nov 2, 2021〉Many foreign-born residents in Hong Kong are making purchases for investment, particularly in Britain, Australia and Europe, agents say

More Hong Kong-based expatriates are buying properties in their home countries or other overseas markets, boosting the number of transactions by 30 per cent to 40 per cent this year, according to agents and bankers.

If the trend held, the city's population of expatriates - who account for a large portion of the home leasing market in the city, particularly the high-end segment - would decline, potentially affecting the overall rental market, analysts said.

The number of people employed by companies whose parent firms are located outside Hong Kong has fallen by 4 per cent to 473,000 this year from the peak of 493,000 in 2019, the latest figures from the government showed, suggesting fewer foreign-born residents in the Asian financial hub.

"[We have] had a very busy year with transactions from Hong Kong-based expatriates," said John Treacy, director at One Global Expat, which handles expatriate clients of Singapore-based property agency One Global Property Services.

"Over 150 expatriates have purchased with us in 2021, which is up 40 per cent from last year."