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Property News Weekly Digest
〈China Daily, Dec 18, 2021〉Hong Kong-listed Shun Tak Holdings is said to have called off the en-bloc deal for High Point condominium, possibly making it the first casualty of the latest property cooling measures announced by the government last week.

Shun Tak, which is understood to have forfeited its S$1 million tender deposit, did not respond to queries from The Business Times by press time. Savills, which is the marketing agent for High Point, declined to comment when contacted on Thursday (Dec 23) night.

It was announced on Dec 9 that Shun Tak had clinched the freehold 22-storey condominium in the Orchard area for nearly S$556.7 million - which would have been the Hong Kong group's fifth acquisition in downtown Singapore in 5 years.

The land price for the site translated to S$2,537 per square foot per plot ratio (psf ppr) including the development charge of S$18 million. Savills had said at the time that the sale price was the highest land price (psf ppr) transacted since July 2018.

Amid the backdrop of a global pandemic and still-buoyant property market, the government implemented another round of cooling measures on Dec 16 to prevent the market from over-heating.

〈China Daily, Dec 18, 2021〉Cash-rich Hong Kong companies are increasingly snapping up prime land on the mainland, which used to be rare until recently, as their Chinese rivals shun land sales to avoid debt.
Shui On Land, the flagship property company of Hong Kong-based Shui On Group, bought three residential parcels in Wuhan, the capital of Hubei province, for 17 billion yuan (HK$20.8 billion), according to an exchange filing on Tuesday.

The Shanghai-headquartered developer bought the parcels in Wuchang district, which forms part of the urban core of Wuhan and is one of the city’s 13 urban districts, as part of a joint venture.

The plots were part of Wuhan’s third land sale of the year. A total of 33 parcels were sold on Tuesday that fetched 40.87 billion yuan.

"Mainland private housing companies have encountered resistance in acquiring land, similar to liquidity," said Yan Yuejin, research director at the Shanghai-based E-house China Research and Development Institute.

The liquidity crunch at Chinese developers has given Hong Kong -based housing companies more room to acquire land and invest in large-scale real estate projects, he added.

"This fully shows that the capital situation of Hong Kong-based enterprises is not bad, while the potential for land acquisition is huge."

〈The Standard, Dec 18, 2021〉Anticipation over quarantine-free travel between Hong Kong and the mainland as the end of the year looms gave the commercial property market a boost, with both volume and turnover seeing significant increases last month.

According to Midland IC&I researchers, the number of retail property deals increased 22.3 percent year on year to 137.

And total turnover increased 52.9 percent to HK$35.5 billion, outperforming the corresponding period last year by 115.9 percent.

According to an insider, a shop at Upper River Bank, Kai Tak, developed by KWG Group and Longfor Properties, sold for HK$300 million, or HK$24,600 per square foot.

The shop has a floor space of 12,217 sq ft, with the ground floor taking up 6,719 sq ft and the first floor the remainder.

The price was 23 percent higher compared to a similar space sold at the neighboring Oasis Kai Tak last year.

Meanwhile, the retail leasing market has begun to tick up as opportunities in prime retail districts continue to fall and rents in some districts rise, according to Cushman & Wakefield.

〈Asian Post, Dec 18, 2021〉The average cost of fitting out an office in Hong Kong has re-bounded to pre-Covid-19 levels and is expected to increase further next year because of rising business confidence as the city recovers from the pandemic, according to JLL.

The cost of designing and building workspaces jumped 9 per cent to HK$935 per square foot this year after dropping in 2020, the real estate consultancy said in its Asia-Pacific fit-out cost guide for 2021-22. No projections were provided for next year.

“The market has recovered and resumed to normal as the pandemic is contained and companies’ confidence towards the business outlook has increased,” said Ryan Wong, head of project and development services at JLL in Hong Kong . “This has supported contractor pricing.”

Hong Kong ranked ninth in office fit-out costs, the same as last year. Tokyo was the most expensive at HK$1,381 per sq ft, while Ahmedabad in India was the cheapest at HK$484 per sq ft.

〈China Daily, Dec 18, 2021〉China is urging large private and state-owned property companies to acquire real estate projects from troubled developers to reduce risks that mounting debt piles will destabilize the economy, the official China Securities Journal said yesterday.
The People's Bank of China and the China Banking and Insurance Regulatory Commission recently issued a notice to financial institutions, urging them to strengthen financial support for such acquisitions, the newspaper reported.

But only the acquisition of real estate projects, rather than acquiring stakes in the developers, would be encouraged, the newspaper said. Meanwhile, developers without financial problems are also being encouraged to issue bonds to fund such acquisitions, and the PBOC is urging financial institutions to invest in such debt instruments, according to the newspaper.