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Property News Weekly Digest
〈China Daily, Dec 4, 2021〉Over 780 shoebox units in Green Form home ownership scheme’s latest batch remain on the market

More than 780 shoebox flats put on the market in the city’s latest batch of subsidised housing units have gone unsold for over a month, even as all the larger flats offered under the scheme were quickly snapped up.

The Housing Authority offered up a total of 2,649 new flats for sale under the Green Form Subsidised Home Ownership Scheme (GSH) on October 29, including 2,112 units at Kai Chuen Court, which is situated above the Diamond Hill MTR station in Kowloon. Half of the units at Kai Chuen were sized between 184 sq ft and 287 sq ft.

However, as of yesterday, 254 of the Kai Chuen flats remained unsold, accounting for 12 per cent of the estate. All of them were smaller than 200 sq ft

Cleresa Wong Pie-yue, chairwoman of the authority’s subsidised housing committee, acknowledged that the smaller flats were less popular.

"We thought flats in Diamond Hill would be welcomed by the buyers given their urban location, but apparently it’s not exactly what we expected," she said. "We should seriously look at the proportion of different flat types for GSH and see what can be done to cater to buyers’ needs."

〈The Standard, Dec 4, 2021〉Mainland developer Yuzhou Group (1628) pledged its headquarters building in Shenzhen as collateral recently to secure a bank loan of 1.1 billion yuan (HK$1.35 billion), according to researcher REDD.

But it remains unclear how Yuzhou Group intends to utilize the loan. The collateral asset was valued at 3.5 billion yuan, along with a 400-million-yuan debt.

The loan, provided by a Chinese joint-stock commercial bank, has been fully drawn down, REDD claimed citing a source.

In other property-related happenings, China Aoyuan (3883) has reportedly put a revitalized industrial building in Kwai Chung up for sale. That comes with China Aoyuan seeking to ease a liquidity hurdle through disposing of properties in Hong Kong.

With a floor space of 117,000 square feet, the 12-story AOffice46 Building- Aoyuan's first project in Hong Kong - offers around 210 office and meeting rooms with a price range from HK$7,100 to HK$13,277.

The deal came two weeks after the mainland-based developer sold properties and parking spaces on Robinson Road in Mid-Levels, collecting HK$900 million.

〈Asian Post, Dec 3, 2021〉The debt crisis affecting Chinese developers, which has reduced the bidding frenzy at land auctions in the mainland, has given a Hong Kong property firm an opportunity to acquire a prime parcel.

On Tuesday, conglomerate HKR International won a prime residential site in Shanghai with a bid of 830.4 million yuan (HK$1 billion), its first acquisition in the nation’s commercial capital in nearly two decades.

The Shanghai municipal government is currently conducting its third land auction of the year. Eight of 27 plots have been sold, with most bought by state-owned enterprises. The auction ends tomorrow.

"We feel the competition is less compared to previous land sales," said Violet Lam, general manager for business development and marketing at HKR International.

The company will consider participating in an auction in Hangzhou, Zhejiang province, in the coming weeks, she added.

As major mainland cities have recorded a tepid response to land auctions in recent months, some governments have slashed prices to drum up demand.

〈China Daily, Dec 2, 2021〉Mid-sized Hong Kong property firms are picking up residential plots at heavily discounted prices from cash-strapped mainland developers who are speeding up asset sales to repay debt.

Far East Consortium International recently snapped up two land parcels, one of which was from the heavily indebted Kaisa Group Holdings.

"We may allocate more resources to increase our land bank in Hong Kong after we cash in on our overseas property investments," said Chris Hoong Cheong Thard, managing director of Far East Consortium.

Since 2015 the developer has diversified its property investments in various markets such as Singapore, Malaysia, Australia and Britain, maximising its investment opportunities by taking advantage of different property cycles.

Highly indebted mainland developers, from China Evergrande Group to Kaisa, have been trying to buy time with partial repayments and debt restructuring in recent months as they have faced a liquidity crunch after Beijing instituted new rules to stem speculative bubbles in the residential property sector

〈The Standard, Dec 1, 2021〉Hong Kong saw a record 199 transactions for luxury residential homes worth over HK$100 million in the first three quarters of 2021, up 131.4 percent from a year ago and 23.6 percent higher than 2018 when the market was also buoyant, real estate consultancy JLL said.

The market value of luxury homes dropped 12.6 percent over 18 months between mid-2019 and end-2020 but on entering 2021, as prices were perceived to have sufficiently corrected, buying sentiment began to return and the number of transactions rose, according to JLL research.

Consequently, prices of luxury homes have rebounded 5.7 percent in the nine months since the beginning of this year, though they are still 7.6 percent below their peak.

JLL expects that a total of 478 residential homes with areas of more than 160 square meters will be completed this year, an increase of 83.8 percent over last year.

It said the supply of these residences will remain comparatively high in the years to come with 429 expected in 2022 and 332 expected in 2023.