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Property News Weekly Digest
2020/8/1
〈The Standard, July 31, 2020〉Commercial lenders in Hong Kong say they are concerned about a 30 percent drop in building values over the past 12 months and will consider calling in or restructuring loans if values fall much further.

If the lenders call loans or further tighten the lending requirement, a new round of commercial property sell-off may be triggered.

Hong Kong property prices fell 4.2 percent in the first half, but still topped the world with a price of US$4,440 (HK$34,632) per square foot, according to Savills, which added that SAR's decline was the fifth greatest out of the 28 cities tracked and the most in Asia.

In the secondary market, the owner of a 534-sq-ft property at St Barths in Ma On Shan lost at least HK$1.06 million after selling it for HK$9.8 million. The sale will incur 10 percent special stamp duty.

In the primary market, Sun Hung Kai Properties (0016) was oversubscribed by 23 times for its 54 units at Regency Bay in Tuen Mun yesterday. The second batch of sales launches today and a featured flat will be sold by tender.

〈Asian Post, July 30, 2020〉Two of Hong Kong's biggest commercial landlords, Hang Lung and Wharf Reic, posted huge losses in the first half of the year as Covid-19 "destroyed the global economy" and condemned retail sales to 17 straight months of decline.

The disappointing results for the two mall owners came as organizations representing restaurants, shops and cinemas issued ultimatums to their landlords to help their plight by cutting rents.

Ronnie Chan, chairman of Hang Lung Properties, said the impact of the pandemic, on top of last year's social unrest and what he described as the "Cold War" between the United States and China, had been unprecedented.

"I have been in this [property] industry for 40 years. I have never seen a time like this," said Chan at a results briefing yesterday.

"I am not sure whether [social unrest] will return. China and the US have waged a war. These will be very bad for business."

He said it was too early to tell whether Hang Lung, which owns the Fashion Walk and Peak Galleria shopping centres, should "embrace the bear market" and make new investments.

〈Asian Post, July 30, 2020〉Hong Kong records 17th straight month of decline in consumer spending, with predictions of worse to come as city battles third wave of infections

Hong Kong retail sales plunged by a third in the first half of this year from the same period last year as the coronavirus crisis devastated the sector.

Consumer spending in June stood at HK$26.5 billion, according to provisional figures the Census and Statistics Department released yesterday, shrinking 24.8 per cent year on year to mark the 17th straight month of decline.

Even though last month's performance reflected an improvement on the 32.9 per cent recorded in May, the drop contributed to the retail sector suffering a 33.3 per cent slump in sales for the first six months of this year from the equivalent period last year.

A government spokesman said the rate of fall in June slowed as the epidemic abated that month, but he warned the industry was facing renewed challenges as the public health crisis worsened.

"With the inbound tourism remaining at a standstill and local consumption hit by the surge in local Covid-19 cases in July and the resultant tightening of social-distancing measures, the operating environment for the retail trade has turned more austere again," he said.

〈Business Post, July 29, 2020〉Cashstrapped Hong Kong developer Goldin Financial Holdings yesterday said it had found a new buyer for its waterfront residential plot in Kai Tak, less than two weeks after agreeing to sell it to an offshore buyer - an about-turn that comes with an immediate loss of HK$450 million.

Goldin signed an agreement on Monday to sell the asset known as Kai Tak Area 4B Site 4 in Kowloon for HK$3.477 billion to a little-known entity called Yan You, it said in a Hong Kong stock exchange filing. The new deal comes with a profit-sharing plan for residential units and parking spaces in the former airport runway site, it added.

The change of mind suggests a scramble for some of Goldin's prized land bank in the city as the developer controlled by billionaire chairman Pan Sutong seeks to fend off hostile creditors.

The company is the first to face major trouble from the downturn in Hong Kong's property market that stems from the US-China trade war, social unrest and the coronavirus pandemic.

"We have different interested parties who were willing to give better offers than the one we announced a week ago," a person close to the deal said. "It allows the group to fetch a higher price with the profit-sharing plan."

〈China Daily, July 28, 2020〉Guangdong province recently signed off on a pilot project under which a family may purchase affordable housing and share property rights with the government.

Co-owned housing must have no more than 120 square meters of floor space, according to the Guidance on the Development of Housing with Common Property Rights in Accordance with Local Conditions, which was published on Tuesday.

Co-owned housing refers to homes that are developed or purchased by governments and sold to qualified residents at market prices. Purchasers occupy the houses after they have paid part of the price, while sharing the property rights with the government.

The government and the purchasers share the risks.

Apartments of 120 square meters, usually with three bedrooms, are suitable for a family, the rules stipulate. The average family is 3.25 persons.

Qualified professionals from outside Guangdong, as well as residents of the province and the Hong Kong and Macao special administrative regions, can purchase the co-owned dwellings.