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Property News Weekly Digest
〈Asian Post, June 29, 2019〉Hong Kong's government released the smallest allotment of land for building homes in five quarters, as the city's legislative agenda was disrupted by nearly three weeks of sporadic protests.

Two plots in Kai Tak and Tuen Mun that can yield 1,350 flats were released for sale yesterday, along with a commercial parcel and a hotel site valued at a combined HK$152.19 billion, according to the Development Bureau. The number of residential units for the second fiscal quarter that ends in September represented a fall of 35.7 per cent from the 2,100 units in the previous three months.

"In the first two quarters, we have met 40 per cent of the [land supply] target, compared with just about 30 per cent in the same period in the last financial year," bureau chief Michael Wong said.

The slower pace of release puts the administration of Chief Executive Carrie Lam Cheng Yuet-ngor on track to miss its target of releasing enough land to build 13,500 flats for the financial year that began in April. The target is already 25 per cent lower than last year's because of a shift in allocation in favour of public housing.

The real estate market in land-scarce Hong Kong, often taken as a bellwether for the city's economy, is sitting at a precarious juncture, just as the property bull run regained its pace in January after a five-month stumble.

Street protests - involving up to 2 million people on June 16 - have further dampened sentiment, prompting analysts to forecast prices to decline by 2 per cent this month.

〈China Daily, June 28, 2019〉Soho China, one of the country's largest commercial developers, is putting 7.8 billion yuan (HK$8.9 billion) of office assets up for sale, the biggest disposal in its two-decade history, to raise capital to expand its land bank.

The developer yesterday put 20,000 square metres of office space in five Beijing and Shanghai projects on the market. The move conflicts with a pledge by chairman Pan Shiyi a year ago not to sell core assets in either of the two mainland cities.

Unlike many of its peers, Soho China has moved from the "build to sell" model which relies on high turnover. Since 2014 it has followed the tactic used by Hong Kong developers who act as landlords, earning recurring income from rental property.

Developers Country Garden and Evergrande Group have favoured an aggressive building programme based on quick sales, amid low rental income yields that do not cover the borrowing rate.

Soho China's rental income from investment properties rose 4 per cent to 1.74 billion yuan last year. It reported net profit of 1.9 billion yuan, due mainly to a 1.09 billion yuan asset revaluation gain. The result reflected a drop of 59.3 per cent from a year earlier.

"Soho's investment property is too large in the future we'll not buy rent-yielding properties but development sites to sell properties," Pan said in a blog post. "We'll retain our core assets in [Shanghai and Beijing] and we remain bullish on the market for long term."

〈Business Post, June 27, 2019〉The largest property development project in Taipei has been halted after Taiwan's ministry of economic affairs blocked a key investor, citing national security concerns.

Hong Kong-listed Nan Hai Corporation had bid through a wholly owned subsidiary, Nan Hai Development, along with Malaysian property developer Malton to develop a property connecting metro stations, office buildings and shopping malls near the Taipei railway station.

The project, first announced in 2006, had failed to attract eligible bidders in five previous attempts because of the huge investment commitment required - NT$60 billion (HK$15 billion). The total cost of Taipei's landmark 101 tower was NT$58 billion.

In a statement, the ministry said a deal review committee had found Nan Hai "has extreme deep connections" with mainland China and that it "could be easily influenced by mainland policies". It has stopped the consortium led by Nan Hai Development from depositing NT$1 billion as down payment for the project.

The ministry said Bermuda-based Nan Hai was controlled by Chinese citizens and could be easily influenced by Beijing.

Yu Pun-hoi, 61, the company's chairman, is a media mogul. Publicly available information shows he founded print and online media company HK01 in 2016. Before that, he acquired US-based political news website DuoWei News in 2009 and the Hong Kong tabloid Ming Pao in 1990.

〈Asian Post, June 26, 2019〉China Resources Land and Poly Property pay HK$12.9 billion for the residential site at former airport amid subdued investment sentiment

A partnership of two mainland developers paid a lower-than- expected price for a plot of residential land on the former runway of Hong Kong's old Kai Tak airport, as the city's biggest public protests in decades sapped appetite for investments amid the US-China trade war.

China Resources Land and Poly Property Group, the real estate units of two of the largest state conglomerates on the mainland, won a tender for the second-biggest parcel of land that is earmarked for building homes, paying HK$12.9 billion for Kai Tak Area 4C Site 1, according to an announcement by the Lands Department.

The price, equivalent to HK$18,080 per square foot, was lower than the HK$14 billion expected by valuers and about 8 per cent less than that paid for the adjacent Area 4C Site 2 parcel sold on May 7.

"Sentiments have changed recently and developers tend to be a little cautious," said James Cheung, a surveyor at Centaline Surveyors in Hong Kong.

Cheung had cut his valuation for the land parcel by 10 per cent to HK$18,000 per square foot before the tender result was announced.Alex Leung of CHFT Advisory & Appraisal had revised his valuation of the site to HK$17,000 per square foot from HK$20,000.

〈Business Post, June 25, 2019〉The 22-year-old chief executive of a high-end education centre has splashed out HK$916 million for a house at one of Hong Kong's most prestigious addresses.

Matthew Cheung Siu-woon bought the 8,674 sq ft house at Mount Nicholson on The Peak earlier this month, according to a Land Registry document released yesterday. It comes at a time when most analysts are expecting the luxury property market to be dampened by poor sentiment.

The young tycoon paid HK$105,603 per square foot for House 15, which comes with a 4,352 sq ft garden and a 1,178 sq ft rooftop. He is the chief executive of Causeway Education, which charges secondary students about HK$920 per hour for a course in mathematics.

The document showed the deal was completed on Tuesday. Cheung is executive director of his father Kenny Cheung's company Cheung & Sons, which has businesses spanning real estate, education, agriculture, building materials and mining. Causeway Education is a unit under Cheung & Sons.

According to the firm's website, as the second-generation of the Cheung family, Matthew Cheung started his first business venture, Prime Mandarin, at the age of 19 when he was a university student at the London School of Economics and Political Science.
The property arm of Cheung & Sons stretches across the mainland, Hong Kong, Australia, Britain and the United States.