〈Asian Post, July 22, 2017〉Shenzhen developer likely to fetch 5.35pc in rental yields from leases on London office block after tycoon Chen Hongtian completes purchase. Cheung Kei Group, the developer held by the owner of Hong Kong's most expensive mansion, has completed its £410 million (HK$4.2 billion) purchase of a landmark 12-storey office building in Canary Wharf in the biggest property sale in London's main financial district since 2014.
After the acquisition, Chen Hongtian would rename the building on 20 Canada Square as Cheung Kei Centre, a statement said. The 556,000 sq ft office building, mostly leased out to BP and Standard & Poor's, was put up for sale through JLL in March and was first reported to be sold to Chen at the end of last month.
Chen, who promised to pay up all the cash within one month of purchase, bought the building from Canada's Brookfield Property Partners, beating rival bids by Sidra Capital of Saudi Arabia and a joint venture between Hines and HSBC Alternative Investments. Leases on the building could generate up to 5.35 per cent in rental yields for Shenzhen-based Cheung Kei.
Chinese capital has been increasingly pouring offshore for assets and investments in search of higher returns on concern that the yuan could lose its value at home. "Most of these types of investment are funded offshore, so the purchase is not subject to China's capital controls," Knight Frank's head of China research David Ji said.
London's property assets were attractive for global investors for their stable return and potential for capital appreciation, given its status as a global financial centre with market depth and liquidity, he said.
In March, Chongqing developer CC Land Holdings agreed to buy the Leadenhall Building in London, also known as the "Cheese grater", for £1.14 billion, making it the largest-ever Chinese purchase of British real estate..
〈Asian Post, July 22, 2017〉Hong Kong's Hang Seng Index rose for a ninth consecutive day yesterday, as property developers Sunac China and Guangzhou R&F surged after Wanda Group said it had revised its previous asset disposal plan.
The Hang Seng Index (HSI) gained 0.3 per cent, or 68.05 points, to 26,740.21. The Hang Seng China Enterprises Index, or the H-share gauge of mainland companies trading in the city, eased 0.1 per cent, or 13.69 points, to 10,846.83.
Mainland equities increased for a third day, with the Shanghai Composite Index adding 0.5 per cent, or 18.13 points, to 3,747.88. The ChiNext gauge of smaller firms rose 0.2 per cent.
Property developer Wanda, owned by billionaire Wang Jianlin, will now sell 77 hotels for 19.9 billion yuan (HK$23 billion) to Guangzhou R&F, while Sunac China, controlled by tycoon Sun Hongbin, will buy 13 tourism-related projects from Wanda for 43.8 billion yuan, scaling back from the previous 63.7 billion yuan worth of acquisitions. The three companies together made the announcement in Beijing on Wednesday.
Sunac's Sun said the altered deal will reduce the company's debt and free up more cash.
"The asset purchases are good for Sunac and R&F as they will be helpful to expand their business scopes," said Ken Chen, a strategist at KGI Securities in Shanghai. Sunac China surged 14.2 per cent to HK$19.64 yuan while Guangzhou R&F climbed 6.8 per cent to HK$13.80.
Hong Kong Exchanges and Clearing led advances yesterday, rising 4 per cent to HK$221.4 as Goldman Sachs lifted the target price of the stock by 2.1 per cent to HK$245.
〈Asian Post, July 21, 2017〉The poor may live in government-approved subdivided flats once interim design and construction requirements are laid down, according to the Hong Kong Institute of Surveyors.
Its reaction follows a pilot scheme recently floated by housing minister Frank Chan Fan that would allow non-governmental organisations to operate approved flats to help some of the 200,000 people stuck in unsuitable accommodation.
The institute wants authorities to come up with guidelines on partitions, drainage, fire safety and ventilation at such flats."These are short-term interim housing needs, we cannot deny the reality that there are people living in hazardous conditions. This is not lowering living standards, but safety and hygiene should always come first," said Vincent Ho Kui-yip, chairman of the group's building policy panel.
There is no legal definition of a subdivided flat, but the term is commonly used to describe cases where a flat is partitioned into two or more self-contained cubicles. Many conversions infringe building regulations and pose fire safety and structural risks.
According to the government, there were nearly 200,000 people in 88,000 subdivided flats in 2015. About 57,100 of those households, 65.2 per cent of the total, lived in 75 sq ft to 140 sq ft units.
Ho said it was possible to partition flats without breaking the law, as long as each unit was not subdivided into too many rooms. Although details of the pilot scheme have yet to be announced, most flats would come from tenements in urban areas, possibly leased out by landlords and property investors to NGOs at a discounted market price. The institute also urged the government to formulate a long-term policy targeting existing substandard subdivided flats.
〈China Daily, July 20, 2017〉Orient Overseas Container Line (OOCL) and Cosco Shipping announced on July 9 that the two shipping giants had reached an agreement for Cosco and Shanghai International Port Group (SIPG) to wholly acquire OOCL’s shipping arm Orient Overseas International Line (OOIL) for $6.3 billion. Some commentators say the deal has drawn an era in Hong Kong’s shipping industry to a close.
Competition in the global shipping market intensifies every day. Before the OOIL buyout deal was announced a container shipping alliance between Maersk Line of Denmark and Mediterranean Shipping Company (MSC) of Switzerland was No 1 in the world. To secure its place in the global shipping market Cosco’s container shipping arm has also forged an alliance with OOIL and CMA CGM China Shipping.
After acquiring OOIL with SIPG, Cosco Shipping Lines is now the third-largest of its kind in the world. That is why this buyout deal serves the long-term development interests of all parties concerned.
But the deal does end an era in Hong Kong’s shipping industry. In the 1970s Hong Kong’s shipping market was dominated by four big companies — Sir Pao Yue-kong’s World-Wide Shipping Group, Tung Chao-yung’s OOCL, Tsao Wen-king’s IMC Group and Chao Tsong-yea’s Wah Kwong Maritime Transport Holdings. Before the sale of OOIL to Cosco and SIPG, OOCL was the only shipping giant left standing — the other three had all lost steam and faded away. Now the era of Hong Kong’s shipping “big four” is finally history.
Meanwhile, among all the corporate giants that have risen to prominence in Hong Kong since the 1970s only Li Ka-shing has successfully transformed his business empire from a real-estate developer into a diversified crossnational conglomerate. For decades Hong Kong has not seen another one like Li’s Hutchison Whampoa. In contrast, Hong Kong’s mainland neighbor Shenzhen has become home to a number of big high-tech companies with international reach in the past two or three decades, including telecom system solution provider Huawei Technologies and internet startup Tencent.
〈Macau Daily, July 18, 2017〉Centaline Property recorded an increase in its real estate sales during the second quarter of this year, posting an increase in its transactions in May. Due to the policy of tightening mortgage lending conditions for both non-first-time resident buyers and non-resident buyers, who had either purchased a residential property, or entered into pre-purchasing an unfinished flat, the firm saw a significant increase in buyers purchasing properties before the policy came into effect.
The firm recorded the highest transactions of the second quarter in over four years.
According to government figures, there were 3,542 transactions in the second quarter of 2017. Centaline Property attributed the increase to the new MSAR policy in May.
In May, pre-purchasing of flats for the firm hit a record of 535, a figure that was triple the number of pre-purchases in April. Compared with the fourth quarter of 2016, the real estate firm saw an expansion in buyers’ purchasing power, as there were new apartment projects that were launched. However, sales in the first quarter of 2017 dropped.
Until mid-July, the real estate market remains stable and Centaline Property is expecting the situation to be maintained until the third quarter.
The company believes that rent law, which suggests that rent contracts should start from three years, will reduce residents’ desire to buy apartments, and sales of transaction might decrease again. Thus, real estate agencies will face a challenge in third quarter.
Speaking on the sidelines of yesterday’s press conference, Jacky Shek, senior director of Centaline Property, noted that the real estate market in Macau is healthy, adding that the Hong Kong-Zhuhai-Macau Bridge would bring a positive effect to Macau’s overall economy.