〈Asian Post, July 29, 2017〉Latest data points to a 13-year high over the next three to four years, however analysts say this is unlikely to ease sky-high home prices which have already surged 10 per cent since January

Hong Kong's supply of new private flats will climb to 13-year high of 98,000 over the next three to four years, according to the latest quarterly data from the Transport and Housing Bureau, but analysts say it is unlikely to cool sky-high home prices.

The latest estimate was 2 per cent higher than the projection of 96,000 units made during the first quarter. Thomas Lam, senior director at Knight Frank, believed the city's private housing supply would peak during this year and next year.

"Although the government has accelerated land sales to boost new flat supply, sales in the secondary market have almost come to a standstill. They have had little impact on reining in home prices as demand will hardly be satisfied by new flat supply alone," he said. At the same time, developers were not in a hurry to offer price cuts in view of the strong demand, Lam said.

Future home price movements could hinge on whether the government introduced further cooling measures, he said. Centaline Property Agency's latest Centa-City Leading Index, which reflects sales at 100 large housing estates across the city, edged up 0.46 points to 159.88 in the week ending July 28 from a week earlier.

Hong Kong home prices, already the world's most expensive for an urban centre, have surged 10 per cent since January.

The surge in prices despite additional supply underscores the challenges facing Chief Executive Carrie Lam Cheng Yuet-ngor as she addresses what has been labelled as the biggest concern for Hongkongers.

During the first half of this year, 8,800 units were built, according to government data. In 2016, the number of private flats completed reached 14,600, the highest since 15,700 flats were completed in 2014.

Of the 98,000 units to come on the market over the next three to four years, 29,000 would be from government land sales where construction may begin at any time, 61,000 had not yet been offered for presale and were still under construction, and 8,000 were unsold flats at completed projects, data from the Transport and Housing Bureau showed yesterday.

〈Asian Post, July 29, 2017〉The landmark London office block known as the Walkie Talkie has been sold to a unit of Hong Kong-based food giant Lee Kum Kee Group in the United Kingdom’s biggest deal for a single office building.

LKK Health Products Group announced the purchase of the iconic 37-story building at 20 Fenchurch Street, in the capital’s insurance district, for 1.28 billion pounds ($1.68 billion) from developers Canary Wharf Group and Land Securities, on Thursday.

The purchase is the latest Chinese investment into London’s commercial property sector fueled by the pound’s depreciation amid Brexit uncertainties.

The deal follows CC Land’s purchase of London’s Leadenhall Building for 1.15 billion pounds in March this year. The acquisition was made through LKK’s wholly owned subsidiary Infinitus Property Investment.

The company said the deal benefits from both reasonable rental income and stable capital appreciation, and will be a long-term investment.

The Walkie Talkie is a landmark building unique for having larger areas on its upper floors. It has 66,240 square meters of office space, currently fully leased to investmentgrade-rated commercial tenants, and houses the popular, three-story Sky Garden.


The transaction broke the record for a single UK asset, surpassing the 1.2 billion pounds paid by the Qatar Investment Authority to acquire the HSBC Tower in London’s Canary Wharf in December 2014.

〈China Daily, July 28, 2017〉Real estate investment is unexpected factor in growth of GDP Real estate investment is unexpected factor in growth of GDP Despite government curbs to stem some of the feverish buying of residential property last year, real estate investment was one of the surprise factors behind the better-than-expected second quarter GDP growth in China.

Property investment grew by 8.5 percent in the first half compared with the same period last year, boosting construction and other sectors Much of the growth was in China's lower-tier cities, some of which have escaped measures such as mortgage restrictions to cool activity.

Henry Chin, Hong Kong-based head of Asia-Pacific research for CBRE, the commercial property services company, says fears of a property bubble remain overstated in China. 'The demand is still very strong in China with the huge number of students graduating, looking for a job and also a place to live,' he says. Prices that were already seen as unfavorable grew by 25 percent in Beijing and by about 19 percent in Shanghai in 2016.

The property price to income ratio is now 40.51, almost double the 23.87 of London, where there are also issues of affordability, according to data company Numbeo. 'This is an issue bothering a lot of people,' says Chin. 'The government is trying to slow property price growth and at the same upgrade people's incomes with such strategies as Made in China 2025 (aimed at moving the economy into advanced manufacturing and other high-end sectors).

This is not something it will be able to do in three or four years,' he says. Another stress point is seen as rental yields, which are typically below 2 percent in China - well less than half of those in some Western markets. Chin says this is not something that concerns many Chinese buyers who are looking for capital gains only. '

Throughout Asia, in cities like Taipei, Hong Kong and Singapore, rental yields are less than 2 percent. It is a mental and cultural attitude of buyers. When they hold a physical asset, they are looking at the capital price and not income.' Chin says one of the real drivers behind the latest GDP figures has been commercial property.

According to CBRE Research, the company's research arm, commercial property transactions reached 100 billion yuan ($14.8 billion; 12.71 billion euros) in the first half, up 48 percent on the same time last year. 'Over the past 18 months there have been a large amount of transactions by domestic buyers because of stronger liquidity sitting in China (as a result of tighter exchange controls),' he says. 'The strongest sectors have been office and logistics. There is now a major oversupply of not-very-good retail malls, which is a sector facing challenges because of the fast growth in e-commerce.' Louis Kuijs, head of Asia.

〈Business Daily, July 28, 2017〉Lee Kum Kee Group sets British record in buying 'Walkie Talkie' building amid weaker pound and soaring prices for commercial properties at home

Lee Kum Kee Group - the Hong Kong company best known for its oyster sauce condiment -has bought an office tower in London for a record £1.3 billion (HK$13.3 billion), landing the biggest commercial property deal in Britain.

Lee Kum Kee's property investment arm, Infinitus, bought 20 Fenchurch Street - a London office tower affectionately known as the "Walkie Talkie" building because of its distinctive top-heavy shape - from Land Securities Group and the Canary Wharf Group, a statement by LKK Health Products' chairman, Sammy Lee, said.

Lee Kum Kee's family business, founded in 1888 by Lee Kum Sheung in Guangdong, has expanded over its long history into a specialist in cooking ingredients, offering more than 200 types of Chinese sauces and one-step recipes in its condiments portfolio.

The oyster sauce is Lee Kum Kee's best-known product, helping to propel the group's growth into one of Hong Kong's best known brands, and allowing the firm to diversify into health products, property, plantations and trading.

Completed in 2014, the37-storey "Walkie Talkie" tower is the sixth-tallest in London, with 1.4 million sq ft of office, retail and commercial space. With a 360-degree view across central London, the tower designed by Rafael Vi?oly Architects features the famous Sky Garden, a popular tourist attraction.

Lee Kum Kee is the latest Hong Kong company to buy real estate overseas amid soaring residential and commercial property prices at home.

Prime office and commercial property prices jumped between 10 and 15 per cent in May, after the HK$23.28 billion sale of the Murray Road land parcel in Central set a new benchmark.

Thomas Lam, head of valuation and consultancy at Knight Frank, said there were not many premium Grade A office buildings anywhere in Hong Kong thatcan be acquired for less than HK$20 billion.

〈China Daily, July 27, 2017〉Citigroup predicts China's GDP will increase 6.8 percent in 2017, and investment and consumption will be key forces to drive up the country's economy in the second half year.

A test high speed train runs on the Baoji-Lanzhou high speed railway in Baoji, Northwest China's Shaanxi province, May 16, 2017.

Citigroup predicts China's GDP will increase 6.8 percent in 2017, and investment and consumption will be key forces to drive up the country's economy in the second half year, according to a report by financial media outlet Caixin.

The third and fourth quarter of this year will also rise 6.7 percent and 6.6 percent respectively, as stated by Citigroup at a conference in Hong Kong on Thursday.

'Investment continues to play an important role in economic growth from July to December, with investment in fixed assets expected to increase 8.9 percent by the end of 2017 from 8.6 percent in the first half,' Liu Ligang, chief China economist of Citigroup, said while attending the economic outlook conference.

'Consumption is also one of the pillars to support economy.' In the aspect of the real estate market, Liu said it would bear downward pressure in the recent period among government efforts to regulate the market, and added real estate was not going to collapse in the medium term.

As China has a great trade surplus and export strength, more open capital market and optimistic treasury bond yields, the exchange rate of renminbi will be stable in the near future, according to Citigroup.