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Property News Weekly Digest
〈China Daily, Dec 18, 2021〉The offer to take Chinese Estates Holdings private by magnate Joseph Lau Luen-hung’s family has collapsed because of strong opposition from minority shareholders.
The family failed to secure the 90 per cent of minority shareholders’ votes needed for the plan to go ahead at a special general meeting yesterday, the company said in an exchange filing.

Lau became the majority shareholder of Chinese Estates when his company, Evergo, acquired a 43 per cent stake in 1986. Since then, he has expanded his investments through Chinese Estates.

Lau’s family offered HK$4 apiece to public investors on October 6, two weeks after the stock plunged to a 10-year low of HK$2.12. The privatisation offer came a month after Chinese Estates incurred a loss of HK$1.38 billion from the sale of 108.9 million shares of embattled developer China Evergrande Group.

〈Asian Post, Dec 17, 2021〉Negative wealth effect’ may halt the city’s property bull run, Morgan Stanley says

The prices of Hong Kong's lived-in homes may decline in 2022, reversing 13 years of gains, as a plunge in the stock market has created a “negative wealth effect” on investors and speculators, according to Morgan Stanley.

Overall prices might fall by 2 per cent next year, the US bank’s analyst Praveen Choudhary wrote in a December 15 report, going against the market’s consensus for prices to gain by between 3 per cent and 10 per cent.

Sales volume of lived-in homes might contract by 15 per cent next year in the secondary market, in a drastic retreat from the 29 per cent surge in the first 11 months of this year, he said. Transactions of newly built homes might shrink by 5 per cent, compared to the 24 per cent growth so far this year.

The contrarian forecast was a result of the 18 per cent slump in the Hang Seng Index since July 1, the world’s second-worst performer this year, which “suggests a negative wealth effect that has historically resulted in a decline in property prices”, Choudhary wrote.

〈China Daily, Dec 16, 2021〉The Hospital Authority will offer low-interest loans of up to HK$6 million per head to public hospital staff to buy flats in an attempt to stem the worsening brain drain.
The staff - nurses, doctors and even cleaners - are entitled to the loans as long as they have worked at the authority for more than three years.

Last month the loss of public doctors rose to 6.2 percent from 4.9 percent in September and nurses to 7.7 percent from 6.7 percent, the authority said yesterday.

The loan scheme was passed in a general meeting yesterday, together with two other manpower retainment policies - strengthening the promotion ladder and establishing a Hospital Authority Academy.

Under the low-interest home-loan scheme, employees can borrow a sum equivalent to 36 to 48 months of employees' salary, with a cap between HK$5 million and HK$6 million, at an interest rate of just 1 percent - much lower than that in the private market - with a repayment period of up to 20 years.

The scheme is open to all employees, including medics and non-medics, who have worked in the authority for over three years and are buying homes to live in, not for speculation.

〈The Standard, Dec 15, 2021〉Kerry Properties (0683) has won the bid for the Urban Renewal Authority's Hung Fook Street/Ngan Hon Street development project in To Kwa Wan for HK$5.59 billion, beating seven other competitors.

That is also the first time that Kerry has won a URA project since 2005.

The project covers a site area of 4,581 square meters and will provide a maximum total gross floor area of 41,229 square meters upon completion.

The successful developer will be required to construct the development in compliance with the requirements of the master design control of To Kwa Wan as set out in the agreement of the project to create synergy with adjoining development projects of the URA,

The project will also enhance the livability of the district by adopting place-making and smart initiatives.

Separately, The Wharf (0004) has paid HK$700 million together with four sites totaling 190,000 sq ft in Tung Chung to Ebenezer School in exchange for the redevelopment of the current site of the school at Pok Fu Lam, local media said.

〈China Daily, Dec 14,2021〉A string of defaults by developers in China since October has dampened sentiment in the housing market, with new home prices slipping for a second month.
Prices of new homes in 70 cities, excluding state-subsidised housing, dipped 0.33 per cent last month, compared with October, figures from the National Bureau of Statistics showed yesterday.

They edged down 0.25 per cent in October after stalling in September.

Overall, contract sales by the country's top 100 developers plunged 38 per cent from a year earlier to 751 billion yuan (S$161.4 billion) - 6 per cent more than the drop in the previous month, according to preliminary data by China Real Estate Information Corp.

Concerns over the health of Chinese property firms deepened on Monday when the share price of Hong Kong listed Shimao Group plunged 20 per cent amid fresh rumours that the developer had problems servicing its debt.

Shimao's price decline persisted until yesterday, when it hit HK$5.49 - down 3.17 per cent from the opening.