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Property News Weekly Digest
2019/8/31
〈Asian Post, August 31, 2019〉With an eye on expansion in the Greater Bay Area, Sun Hung Kai Properties has appointed to its board Wu Xiangdong, a former executive director of state-owned developer China Resources Land.

The company, Hong Kong's largest developer by market value, said Wu, 52, had been appointed as an independent non-executive director, with effect from September 1. He is widely expected to use his expertise to speed up its mainland property projects.

"It is a clever move, as SHKP needs an expert with a strong background in commercial properties to speed up its expansion in the Greater Bay Area," said Louis Tse Ming-kwong, managing director of brokerage VC Asset Management.

The Greater Bay Area refers to the Beijing government's plan to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub.

The role of independent non-executive director would provide creative contribution to the board through independent oversight and constructive views, Tse said. "But you never know. Wu may be promoted as executive director, if he proves his worth," he added.

It is an unwritten rule that all senior executives at state-owned enterprises should be members of the Communist Party. Wu will be the first party member to serve on the SHKP board.

〈Asian Post, August 30, 2019〉The ambitious Greater Bay Area plan will not curb Hong Kong's soaring property prices, a veteran developer said.

"We cannot force people to go north to live across the border. You can offer them initiatives and opportunities, but Hong Kong is their home," Chinachem chief executive Donald Choi told the audience at the South China Morning Post's China Conference yesterday.

"The elephant in the room is confidence in social institutions. Not just about property, but also about the health system, food safety, education and so on," Choi, who was former managing director of property giant Nan Fung Development, added.

The Greater Bay Area initiative is part of Beijing's plan to transform Hong Kong and 10 cities around the Pearl River Delta into a thriving global centre of technology, innovation and economic activities.

Hong Kong, Macau, Shenzhen and Guangzhou would be the four key cities, while Beijing has regarded a closer integration between the mainland and Hong Kong as one of the five main strategies for the initiative.

Hong Kong and Macau are governed by the principle of "one country, two systems", which offers these two cities separate legislative and legal systems, and allows free flow of information and certain rights that are not enjoyed on the mainland.

〈Business Post, August 29, 2019〉Some 8,000 property agents in Hong Kong face "elimination" as the city's prolonged street protests and the US-China trade war dampen interest in buying and hasten falls in prices.

"In the last two weeks, the extent of decline has sped up," said Sammy Po, chief executive of the residential division at Midland Realty, adding that some homeowners were willing to slash prices by 10 per cent or more in the hope of finding buyers quickly.

Po said as transactions shrink in the second half, keener competition for a limited number of deals could lead to the elimination of about 20 per cent of agents' jobs in the city.

"There are about 40,000 agents. We estimate there will be a total of about 4,000 to 5,000 deals a month, which means about 10 agents will compete for each deal [per month]," he said.

The secondary market will be the hardest hit, with only about 40,000 deals taking place this year, the lowest since records began in 1996, said Freddie Wong, chairman of Midland Holdings.

"The number of deals [of used homes] will be worse than when Sars occurred," Wong said.

He noted that his estimated total for this year would be 13 per cent lower than the 46,131 deals completed in 2003, the year of the outbreak of severe acute respiratory syndrome.

Midland said the asking prices of around 4,072 listings had been cut as of Monday, up 58.6 per cent from June 1, before the extradition bill controversy erupted.

〈The Straits Times, August 28, 2019〉Hong Kong investors pumped US$1.4 billion (S$1.94 billion) into Singapore commercial real estate in the first half of the year.

This accounted for more than a quarter of the US$5.2 billion in total outbound property investment from Hong Kong in that period, making Singapore the top destination.

"Some of these Hong Kong investors and funds have been active in Singapore for some time, but the political situation (there) has coincided with more high-net-worth individuals and family offices inquiring on potential purchases," said Ms Christine Li, head of research for Singapore and South-east Asia at Cushman & Wakefield, which compiled the data.

Key transactions here included Hong Kong private equity firm Gaw Capital Partners' $710 million purchase of the Robinson 77 office building in February.

It also led a consortium, which included insurer Allianz, to buy the Duo office and retail space for $1.58 billion. This month, fund manager Arch Capital Management completed the purchase of Anson House for $210 million.

There is also increasing interest in Singapore retail properties among Hong Kong investors, with the recent $520 million acquisition of Chinatown Point mall by Pan Asia Realty Advisors, a joint venture between Mitsubishi Estate and Hong Kong-based CLSA Capital.

〈Investor News, August 27, 2019〉Sales of Hong Kong's notoriously expensive car parking spaces dropped more than 40 per cent in the first eight months of the year compared to the same period in 2018, partly due to the continuing protests dampening investor sentiment, according to analysts.

"The investment atmosphere has been poor over the past few months, particularly from June to August. Without a doubt, this has affected both those wanting to buy and sell [parking spaces]," said Richard Lee, chief executive of agency Hong Kong Property .

"A lower supply of parking space has been made available this year, whether from property developers or owners," he said.

In the first eight months to August 22, 4,248 parking spots changed hands, compared to 7,799 in the same period last year, a drop of 45.5 per cent.

The transaction volume dropped 34.1 per cent to HK$9.87 billion in the eight-month period, from HK$14.9 billion in the same period last year, according to Land Registry data compiled by Hong Kong Property agency.

The city's slowing economy has made investors cautious, said Reeves Yan, executive director and head of capital markets at CBRE Hong Kong.

"Parking spaces are quite special, because the return on investment is quite low compared to other forms of property, such as office buildings," he said. "Those who buy car parking spaces usually use them themselves rather than for investment. In the current economic environment the transaction volume has decreased, while the price hasn't adjusted to the change."