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Property News Weekly Digest
2020/10/10
〈Asian Post, Oct 10, 2020〉The American Chamber of Commerce in Hong Kong has quietly sold its grade-A office space in Central, the city’s core financial district, becoming the second United States entity to sell its property after Washington revoked Hong Kong’s preferential treatment in July.

The deal was reportedly made earlier this month at a 16% discount to current valuations, local newspaper Sing Tao Daily reported on Friday. AmCham Hong Kong reportedly sold its mid-level unit in the Central Bank of America Center, in a private bid, for about HK$143 million (US$18.5 million).

AmCham acquired the 5,968-square-foot (554 square meters) property in 1996 for HK$54 million, and it appreciated 260% in value over those 24 years.

In a statement responding to inquiries from Apple Daily, AmCham Hong Kong said it was currently consolidating its resources and aimed to "digitize" the chamber while continuing to develop in Hong Kong.

〈Asian Post, Oct 9, 2020〉China Evergrande Group said a nationwide marketing campaign offering 30 per cent discounts had brought it closer to hitting its ambitious full-year sales goal, as the world's most indebted developer pulls out all the stops to generate cash.

The Shenzhen-based firm sold 141.63 billion yuan (HK$163.72 billion) of properties in the 38 days to October 8, including the weeklong National Day holiday. That brought the year's contracted sales to 592.25 billion yuan, or 91 per cent of its sales target, Evergrande said.

The numbers were a relief for investors as shares in the developer had seesawed amid conflicting views about the company's ability to repay 835.5 billion yuan in debt, causing the stock to deviate as much as 30 per cent from its three-month average.

The stock fell 13 per cent in a day two weeks ago when the firm was in the cross hairs of short- sellers betting on its demise, with a fabricated document circulated about its dire circumstances.

"The strong sales in September and October, if coupled with a healthy cash collection rate, will help the company generate the cash required to alleviate its tight liquidity position and address other upcoming debt obligations," said Luther Chai, analyst with Singapore-based debt research firm CreditSights.

〈Business Times, Oct 8 ,2020〉Developer offers first batch of 180 units at The Pavilia Farm at HK$6.3m to HK$19.9m

New World Development (NWD) will offer the first batch of flats at The Pavilia Farm in Sha Tin at lower-than-expected prices, as the city's third coronavirus wave and its worst recession in decades weigh on the property market.

The first batch of 180 units measuring 322 sq ft to 835 sq ft will be offered at prices ranging from HK$16,618 to HK$23,877 per square foot, or HK$6.3 million to HK$19.9 million, each. These flats will be completed in June 2022.

The prices represent a 16 per cent discount when compared with the first batch of flats at The Garrison, a project three minutes' walk away developed by Far East Consortium International in July 2018. The Garrison was completed in March 2019.

The Pavilia Farm, which sits on top of Tai Wai MTR station, will have 3,090 units in total, which will be developed in several phases.

"The poor economic performance and rising unemployment will definitely force developers to price new flats at a lower level," said Vincent Cheung Kiu-cho, managing director at Vincorn Consulting and Appraisal.

〈China Daily, Oct 7,2020〉Some landlords desperate to lure tenants are offering a one-off subsidy to help them fit out their new space as vacancy rate hits 21-year high

Hong Kong's commercial landlords are offering incentives such as renovation subsidies to lure tenants, as the amount of office space lying empty reaches the highest level in 21 years, according to property services company CBRE.

Some had begun providing a one-off subsidy to help new tenants fit out their office space, said Alan Lok, executive director of advisory and transaction services for offices at CBRE.

"In some cases, the landlord would offer a subsidy of about HK$100 per square foot," Lok said during a briefing.

The subsidy was attractive because relocation costs in Hong Kong were high, he said.

For a prime renovation costing HK$1,000 per square foot, the relocation cost might add up to HK$1,200 per square foot after the cost of returning the office to its original state when the lease ends is included. The cost can be spread out to a monthly HK$30 per square foot or thereabouts over three years.

〈Hong Kong Times, Oct 6,2020〉Amajor Hong Kong property developer, New World Development, on Thursday kicked off a mega conservation and redevelopment project to restore the historic State Theatre after consolidating its full ownership of the site through a compulsory auction.

The developer secured the site at the Lands Tribunal reserve price of HK$4.77 billion (US$615 million), the biggest sale of such compulsory auctions in the city. It began buying units of the site from individual owners in 2015 and applied for a compulsory sale in 2018 after its ownership reached 80%. Government approval for compulsory auction was received in August to buy up the rest of the units.

First opened in 1952, the State Theatre in North Point brought down the curtain on 68 years of movie screening in 1997 after showing the last film reel. It was listed as a Grade I historic building in 2017. The conservation project will not only restore the former glory of the site but also transform the city’s oldest movie palace into a "cultural oasis" that served the community, said Adrian Cheng, the executive vice chairperson and chief executive of New World Development.

British firms WilkinsonEyre and Purcell, having worked on the restoration of the former Central Police Station compound Tai Kwun, will be leading the conservation project, which covers a gross area of 36,200 sq ft. Hong Kong’s AGC Design, a participant of the revitalization of the 89-year-old house Lui Seng Chun, is also part of the project team.