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Property News Weekly Digest
〈Asian Post, Sept 12, 2020〉HK remains world's freest economy, but study fears for integrity of legal system

Hong Kong has retained its position as the world's freest economy, but the think tank responsible for the listings said that was likely to change in the future, with the integrity of the city's legal system in doubt.

The Fraser Institute ranked Hong Kong at No 1 for the 30th year running, just ahead of Singapore, but scores for the legal system slumped to their worst level in 20 years, and judicial independence earned its lowest ranking in 16 years.

Fred McMahon, the Canadian institute's Dr Michael A Walker research chair in economic freedom, warned the mainland's influence would have a negative impact on the city's position.

"While Hong Kong remains the most economically free jurisdiction in the world, interference from China, including the violent crackdown on pro-democracy protests, severely undermines Hong Kong's rule of law, which helps ensure equal freedom for all," McMahon said.

He said the city's score would decline further in future years, because there was a two-year data lag for the annual report.

〈The Standard, Sept 11, 2020〉Hang Lung Properties - headed by tycoon Ronnie Chan Chi-chung, who is known for his good connections to influential circles in both the mainland and America - won the bid for the American government's six-block residential property at Shouson Hill, which had been regarded as a "hot potato" over the past three months amid the Sino-US rift.

The developer secured the property for HK$2.56 billion - or HK$54,138 per buildable square foot - at the lower end of market expectations. Estimates put the value from HK$2.13 billion to HK$4.73 billion.

With a huge business interest in China, Chan has no position in the mainland's political advisory body or top legislature, unlike other SAR tycoons. Rather, he has deep connections in US business circles.

He is co-chair of Asia Society, a nonprofit organization founded by a third-generation member of the prominent Rockefeller family in New York.

Chan received his MBA from the University of Southern California. He was a director of US energy giant Enron, which filed for bankruptcy two decades ago as a result of fraud.

In September 2014, Chan's family, through its Morningside Foundation, donated US$350 million (HK$2.73 billion) to Harvard University.

〈Asian Post, Sept 10, 2020〉Sun Hung Kai Properties (SHKP), Hong Kong's biggest developer by market value, is banking on less restrictive Covid-19 measures to help revive its retail and hotel businesses and pull the city's economy out of recession.

The group had suffered this year over restrictions in movements, and its earnings outlook remained uncertain in the medium term, chairman and managing director Raymond Kwok Ping-luen said. Its recovery would depend on the state of the pandemic and measures to reopen cross-border travel, he added.

The easing was "crucial to the performance of property sales, rental income and hotels", Kwok said in an exchange filing yesterday, along with the group's full-year earnings report. "The group's hotel business has been hit hardest by the outbreak."

Hong Kong's economy contracted by 9 per cent last quarter as the pandemic and social unrest dealt a double blow to plunge the city into its worst slump on record since the middle of last year.

〈The Standard, Sept 9, 2020〉Only about a quarter of local merchants are optimistic that the retail market will recover by the end of the year, an American Express survey has found.

And Ronnie Chan Chi-chung, chairman of Hang Lung (0010), forecasts retail rents in Hong Kong will take 10 years to recover to 2018 levels.

"Having been in real estate for over 40 years, I have never seen a time that is as chaotic as now," Chan said.

He pointed out luxury purchases in Hong Kong by mainlanders will be largely gone. The retail rental business may take a decade for rents to recover to 2018 levels.

While footfall in all kinds of mainland malls still lags behind that of the same month a year ago, tenant sales of luxury goods have roared ahead. In time, all retail properties will return to the norm in terms of visitors, although some sales of daily necessities may be permanently shifted to e-commerce.

〈Economic Times, Sept 9, 2020〉Many are looking to fill empty premises with new business ventures as analysts predict no improvement in rental income until the last quarter

The collapse of retail rents and high vacancy rates in some of Hong Kong's main shopping districts are forcing some landlords to get creative, launching new, totally unrelated business ventures to fill vacant space.

Two joint owners of a five-storey retail complex at 53 Carnarvon Road in Tsim Sha Tsui, for example, plan to open their first cosmetics store on the premises on September 17.

Formerly occupied by a jewellery shop, the space will now become a concept store named Art Piece, offering more than 200 cosmetics brands from the United States, Europe, Japan and South Korea. Sales will take place both on and offline.

"Where there is risk, there is opportunity," Art Piece owner M2R Investment said in a written reply. M2R is run by directors Ng Kwok-chun and Ng Kwok-hing, according to a filing to the Companies Registry.

"We see this a good time to create a brand new online and offline platform in the beauty industry. People are getting used to shopping online during the coronavirus pandemic. Our online platform gathers more than 200 trendy beauty brands from all over the world and allows customers to buy anytime, anywhere."