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Property News Weekly Digest
〈The Standard, July 30, 2022〉Some developers are converting hotels in their portfolios into residential developments due to pandemic-mandated border closures that have virtually wiped out the inbound tourism sector here in Hong Kong.

At least six projects have been or are in the process of being rebuilt or converted into residential buildings in the past two years, with the potential of providing 3,320 residential units, according to news reports.

Charles Chan, managing director of Savills Valuation and Professional Services, said that many projects have, in recent years, been rezoned for residential development, and that it is becoming a general trend.

Another major driving force for the rezoning and redevelopment of hotels is the state of the residential property sector, where demand and price rises have shown no signs of abating, said Chan.

〈The Standard, July 29, 2022〉Usually, the transaction volumes and prices of homes in estates along MTR lines are pretty robust. But the opening of the final section of the East Rail line, predicted to drive interest and prices along its tracks, coincided with a sluggish market so its impact was softened.

Centaline Property Agency recorded 496 second-hand sales and purchase registrations in 56 estates along MTR lines last month - a decrease of nearly 30 percent compared with May.

Increases were recorded in the per-square-foot prices at 18 estates in June while 34 saw decreases. And compared with January there was growth in per-square-foot prices at 22 estates.

Louis Chan Wing-kit, Asia Pacific vice chairman of the residential division at Centaline, explained that due to sluggish overall second-hand transaction volumes individual housing estates have been recording sporadic transactions every month, while price increases and decreases per square foot are quite different.

〈Hong Kong Business, July 28, 2022〉Office rent in Hong Kong Island is expected to grow moderately in the second half of the year, Knight Frank reported.

This comes as Knight Frank observed that current rents, particularly in prime locations, have become more affordable compared to pre-pandemic levels.

“We expect demand for prime locations to continue to grow and support overall leasing momentum, driving moderate rental growth in 2H22,” the report read in part. The property consulting firm also noted that this has fueled trends to recentralise.

〈Asian Post, July 27, 2022〉The Hong Kong Monetary Authority (HKMA) has raised its base rate to 2.75% in response to the US Fed’s recent 75-basis points (bps) hike.

The central bank’s new rate took effect on 28 July.

In an announcement, HKMA explained that its base rate is set either at 50bps above the lower end of the prevailing target range for the US Fed rate, or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates (HIBORs), whichever is the higher.

The former was 2.75%, whilst the latter was 0.79%, thus the base rate was set at 50bps above the lower end of the prevailing target range for the US Fed rate.

〈Hong Kong Business, July 26, 2022〉Retail sales have particularly been weighed down by the absence of tourism. Its impact has been felt by burberry, which had to close its three-storey flagship store in Canton Road. Valentino, Tiffany & Co, and Coach have also followed suit as they closed down their respective stores in Canton Road.

“While shop rentals in prime locations dropped drastically, some prime spaces in Russel Street, in Causeway Bay, have become more affordable to local retailers,” knight Frank noted.

Citing market sources, Knight Frank reported that Shop 26 in Russell Street was leased for a monthly rent of HK$200,000, a significant drop from the peak HK$1.52m per month previously.

“On the bright side, the second phase of the HK$5,000 consumption vouchers to be disbursed in August could provide a tailwind, underpinning much-needed retail sales and restaurant receipts for the time being,” the report also read.