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Property News Weekly Digest
〈Asian Post, July 20 , 2019〉The biggest housing site on offer at Hong Kong's former Kai Tak airport received a cold shoulder yesterday as developers took a more cautious stance on the local property market following recent downgrades to the city's economic outlook.

The plot, designated as Area 4A Site 1 on the former runway with a gross floor area of 1.08 million sq ft, received just four bids, according to the Lands Department.

Analysts said they had expected the site to attract between five and seven bids and yesterday's result could be the weakest turnout in the six years since the government started selling land at the former airport to property developers.

"It should be the worst response in the Kai Tak area since the government offered the first lot for tender in 2013," said Vincent Cheung, managing director of Vincorn Consulting and Appraisal.

"Some developers prefer giving up as this large site could involve a total investment of more than HK$20 billion. It may not be worth taking on such a high-risk investment at a time when the environment is surrounded by uncertainties."

The bidding parties included CK Asset Holdings, Sun Hung Kai Properties, a consortium comprising K Wah International, Wheelock Properties and China Overseas Land & Investment and an alliance formed by Sino Land.

As part of the tender, developers are required to incorporate facilities for a residential care home for the elderly and a childcare centre into their plans for the site.

The land parcel is valued at HK$13 billion to HK$16.1 billion, or HK$12,083 to HK$15,000 per square foot.

The response came a day after Standard Chartered, one of Hong Kong's three currency-issuing banks, lowered its growth forecast for the city to 1.4 per cent this year from 2.2 per cent.

〈Asian Post, July 19, 2019〉City's property crisis prompts SHKP and Hongkong Land to offer to build homes for more than 30,000 people on jointly held plot in New Territories

Two of the city's biggest property developers plan to squeeze more than 11,000 homes onto a parcel of land they had originally earmarked for 300 villas as government schemes to boost land supply face delays.

Sun Hung Kai Properties (SHKP) and Hongkong Land Holdings have applied to increase the plot ratio - the gross floor area of a project compared to the size of the plot - of a converted piece of farmland in the New Territories.

They want to raise the ratio by more than 13 times so that the 1.5 million sq ft site in Yuen Long can yield 5.5 million sq ft of living space, according to a document filed with the Town Planning Board.

"Low-rise, low-density housing developments will not make good use of scarce land," SHKP said in an announcement regarding the application. "The proposed development can ease the shortage of housing supply in the city, which should be solved immediately."

The two developers plan to build 11,292 flats with an average size of 484 sq ft.
New World Development's new project in Yuen Long, Atrium House, with similar-sized homes, sold at HK$16,000 per square foot in June.

〈Business Daily, July 18, 2019〉With Bruce Lee's former mansion set to be torn down to make way for a Chinese studies centre in two weeks' time, a fan club of the late kung fu legend has launched an international petition to urge the government to preserve the home, with the owner of the building offering no objection.

Wong Yiu-keung, chairman of the Bruce Lee Club, said at a press conference yesterday: "The building symbolises our collective memory of Bruce Lee, which should be treasured by Hong Kong people and the world. I hope the ... government will preserve the legacy of this influential actor, martial artist and philosopher."

If the government does not heed the fans' request, the club said it would consider raising crowdfunding the money to buy the site, which is where the martial arts master spent his last years with his family.

Restoring the 5,699 sq ft property would cost around HK$100 million, while the estimated price of the site may range from HK$300 million to HK$400 million, the club estimated.

"I won't say [crowdfunding] HK$500 million would be impossible, but I'm not very confident about it happening at [such a] short notice," Wong said.

The block at 41 Cumberland Road in Kowloon Tong is owned by the Yu Panglin Charitable Trust, founded by billionaire philanthropist Yu Pang-lin, who died in 2015.

〈The Standard, July 17, 2019〉Over 70 percent of over 500 respondents felt that it is a bad or terrible time to purchase a home now, a Citi Hong Kong's survey on residential property ownership in Hong Kong for the second quarter found.

More than 70 percent of the young respondents aged between 21 and 29 felt that it is not a good time to purchase a home.

About 2 percent of the respondents felt that it is a good or excellent time to purchase a home in the second quarter, down from 4 percent in the first quarter.

But still, 25 percent expressed a very or rather strong interest in buying property in the second quarter, representing a high percentage in recent years. Nearly a quarter of those aged 21 to 29 have the same interest.

It also found that 28 percent of the respondents expected home prices to fall in the next 12 months, while 36 percent expected home prices to rise -- similar to those in the previous quarter.

Josephine Lee, head of retail bank, Citibank Hong Kong, said: "The results show that many local citizens are expecting that home prices will continue to rise, they still have certain interests in buying a home. We recommend that potential home buyers should first measure their home affordability, comprehensively assess their financial situation and burden, and choose a suitable mortgage plan."

Citibank commissioned The University of Hong Kong Social Sciences Research Centre to conduct the survey, interviewing over 500 citizens by phone in June.

〈Ejinsight, July 16, 2019〉Mainland property developer Jiayuan International Group could make only a slim profit or even a loss on its first residential investment in Hong Kong after it cut prices for the project in a cooling market.

The company offered discounts of up to 37.6 per cent at the T-Plus residential development in Tuen Mun after an initial sale in December drew almost no buyers.

The flats were offered at between HK$13,494 and HK$20,196 per square foot after discounts, meaning some would be priced below the average HK$13,670 per square foot Jiayuan paid for its 70 per cent stake in the project.

"It is possible [some flats in] the project did not make any money," said Sam Chi-yung, a strategist at brokerage Springwaters Financial Securities.

He added that the discounts indicated the developer was speeding up sales in an effort to lower its interest costs on financing, even though it would sacrifice profit margins on the remaining units.

The strategy may have worked as the discounts sparked a surge in buying at sales on Sunday, with 337 units sold that raised an estimated HK$1.1 billion. That would earn Jiayuan about HK$770 million, based on the size of its stake, analysts said.