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Property News Weekly Digest
〈Taipei Times , September 14, 2019〉China has called on its biggest state firms to take a more active role in Hong Kong, including stepping up investment and taking more control of companies in the financial hub, executives familiar with the matter said, as Beijing attempts to calm months of unrest in the territory.

At a meeting this week in Shenzhen, the city bordering Hong Kong, senior representatives from nearly 100 of China’s largest state-run companies were urged to do their part to help cool China’s biggest political crisis in years, three executives, including one who was present, told reporters.

At the meeting, the state-owned enterprises (SOEs) pledged to invest more in key Hong Kong industries, including real estate and tourism, in a bid to create jobs for local citizens and to stabilize financial markets, two of the executives said, speaking on condition of anonymity as they were discussing internal deliberations.

No specific investments were discussed or agreed upon, they said.

The SOEs in attendance included oil giant Sinopec and conglomerate China Merchants Group, one of the sources said.

The meeting was organized by the State-owned Assets Supervision and Administration Commission (SASAC), the powerful central body that oversees China’s sprawling state sector, which includes some of the world’s biggest companies in industries such as steel, energy, shipping and telecoms.

SASAC did not respond to a faxed request for comment. Officials at Sinopec and China Merchants Group did not respond to e-mailed requests for comment and calls to the two companies went unanswered.

〈Asian Post, September 14, 2019〉State media identify soaring property prices as an underlying cause of social unrest and urge government to grab land 'hoarded' by developers

Beijing is piling pressure on Hong Kong's property tycoons to help ease the city's crippling political crisis and social unrest, Asian by developers with "vested interests".

Commentaries published yesterday by the official Xinhua news agency and People's Daily, as well as an editorial in the hardline tabloid Global Times, singled out unaffordable housing as a "root cause" behind young people taking to the streets in anti-government protests that have rocked the city for months.

State media have been highly vocal recently about how the Hong Kong government and even companies should handle the crisis: Cathay Pacific began cracking down on employees taking part in illegal protests and reshuffled its top management after the city's flagship carrier came under severe criticism for its hands-off approach; and the MTR Corporation started closing metro stations and asking police to take action after the rail operator was accused of allowing protesters to use its network to their advantage.

This time state media specifically endorsed a proposal by the Democratic Alliance for the Betterment and Progress of Hong Kong, the city's largest pro-Beijing party, for Chief Executive Carrie Lam Cheng Yuet-ngor to invoke the Lands Resumption Ordinance and take back large swathes of rural land lying unused as a quick option to tackle the shortage of land for housing.

〈Economic Times, September 14, 2019〉Proposed penalty on new completed flats left empty seen adding fuel to the fire amid slowdown in real estate market, the trade war and local unrest

Developers urged the government to consider a temporary suspension of a proposed vacancy tax, as they fear it would intensify the slowdown in a property market already reeling from the US-China trade war and social turmoil.

The tax will target all newly completed flats left empty - unsold and not rented out - for more than six months in a year. Flats are considered finished one year after the developer obtains an occupation permit.

"The introduction of the vacancy tax at the moment certainly will add fuel to the fire," the Real Estate Developers Association of Hong Kong (REDA) said yesterday.

"The Hong Kong government forecast shows that the city's economy is undergoing adjustment. If the adjustment comes fast and sharp, it could trigger a domino effect on the economy it will hurt the stability of the financial system," REDA said.

The government said on Thursday that it would submit The Rating (Amendment) Bill, better known as the vacancy tax bill, for vetting by lawmakers when they returned to work in October after their summer break, with public consultation starting yesterday.

〈The Standard, September 12, 2019〉SHKP chairman Raymond Kwok says shopping malls are also struggling as visitor numbers fall, while he sees no gains in home prices this year

Sun Hung Kai Properties (SHKP), the largest developer by value in the world's least affordable housing market, said its hotel and shopping centre businesses had been hit hard by the protests that were shaking Hong Kong to its core and deterring visitors.

Occupancy rates at the company's hotels had plunged on average by 30 per cent to 40 per cent, with some finding themselves just half-full, said Raymond Kwok Ping-luen, chairman and managing director of SHKP.

"Fewer customers came when a lot of Western countries issued travel warnings, so the hotel industry has been affected quite a lot," Kwok said.

He was commenting yesterday after the firm reported underlying profit jumped 6.6 per cent to HK$32.4 billion for the year to June.

The protests started on June 9, so would have had a negligible impact on the results.

Hong Kong's tourism industry has suffered its worst downturn in more than a decade, with arrivals plunging almost 40 per cent last month from a year earlier.

Market sentiment has been battered by street rallies that are now stretching into their 14th week.

The demonstrations have come on top of a protracted US-China trade war, which had already drained appetite for property in Hong Kong.

Kwok, whose firm is also the largest owner of private shopping centres in Hong Kong, said malls such as New Town Plaza had been affected, with those catering primarily to tourists or mainland visitors being the hardest hit.

〈China Daily, September 11, 2019〉In a rare gesture, Hong Kong’s most influential developer association on Wednesday said it will not oppose the government if it invokes the city’s controversial Lands Resumption Ordinance to take over land for public housing.

The remarks came after the city’s largest political party in the legislature — the Democratic Alliance for the Betterment and Progress of Hong Kong — urged the government to take bold moves to increase the housing supply, including implementing the land ordinance.

The ordinance allows the special administrative region’s chief executive to order the requisition of any land for public purposes.

Chief Executive Carrie Lam Cheng Yuetngor had dismissed similar suggestions last year, saying that it might prompt a wave of judicial reviews against the government, thus failing to deliver as an efficient way to boost land supply.

People’s livelihoods come first, and developers shouldn’t be selfish during such a difficult time, said Stewart Leung Chikin, chairman of the Executive Committee of the Real Estate Developers Association of Hong Kong.

Leung also said the association welcomes collaboration with the government in land developing. The group comprises influential property developers in the city, including Hang Lung Properties, New World Development, Cheung Kong Holdings, and Sun Hung Kai Properties.

The SAR government has invoked the ordinance 13 times for public rental housing, since Hong Kong’s return to the motherland in 1997. A successful case is the Yan Tin Estate in the Tuen Mun district in northwestern Hong Kong, which was delivered in 2018 and now provides 42,687 units for 13,500 people. The land was reclaimed by the SAR government in 2009.