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Property News Weekly Digest
〈China Daily, March 13, 2021〉JARDINE Matheson Holdings (JMH) reported a full-year net loss of US$394 million, reversing from a net profit of US$2.84 billion a year ago, largely due to weaker performances by Astra and Jardine Cycle & Carriage, as well as decreases in property valuations.

Without the decreases in property valuations totalling some US$1.4 billion, the group would have recorded a US$1.09 billion net profit for the year ended Dec 31, 2020, 32 per cent lower than the year ago.

Astra, one of JMH's largest profit contributors, recorded full-year net profit of 16.2 trillion rupiah (S$1.47 billion) which is 26 per cent lower than that for FY2019.

Excluding a one-off gain from the sale of the group's investment in Permata Bank, net profit would have decreased 53 per cent year on year to 10.3 trillion rupiah.

This was mainly due to weaker performances by its automotive, heavy equipment and mining, and financial services divisions, as a result of the impact of the pandemic and related containment measures, JMH said.

Similarly, Jardine Cycle & Carriage's net profit was US$540 million, 39 per cent lower than the same period last year.

Among other factors, this was due to lower contributions from Astra; the group also recorded an impairment loss of US$182 million in respect of its investment in Siam City Cement, "reflecting several years of challenging market conditions".

〈Asian Post, March 12, 2021〉Chinese snap up London offices

UK's swift vaccine roll-out and hopes for economic recovery lead to view better returns are overseas

Global investors, particularly from mainland China and Hong Kong, are snapping up London office properties in anticipation the economy will make a swift recovery as Britain's government rolls out a speedy Covid-19 vaccination programme.

Chinese buyers picked up US$2.12 billion worth of British commercial property in 2020, about a third of the US$6.8 billion they spent in the rest of the world, according to Real Capital Analytics, which tracks transactions worth at least US$10 million each. Britain has been Hong Kong investors' top destination for seven of the past 10 years, it said.

The latest deal has reinforced the view that better returns can be found away from troubles at home. A consortium led by Wing Tai Properties agreed last week to buy an 11-storey building formerly known as Athene Place for an estimated £255 million (HK$2.74 billion), adding to several deals signed by Hong Kong-based investors late last year.

"London is still seen as a safe haven and is the first choice for Hong Kong-based investors looking to diversify their assets out of Asia," said Chris Harvey, a partner at law firm Mayer Brown London.

〈Asian Post, March 11, 2021〉The Government Property Agency is inviting tenders for the purchase of five former government quarters, each consisting of one flat with a car-parking space.

They are located at Baguio Villa in Pok Fu Lam, Elm Tree Towers in Tai Hang, MacDonnell House and Po Shan Mansions in Mid-levels and Wilshire Towers in North Point on Hong Kong Island.

The two at MacDonnell House and Po Shan Mansions will be sold with vacant possession, and the remaining three sold with existing tenancies.

Tenderers must submit their bids before noon on April 9.

Meanwhile, about 2,100 checks were received for 227 units on offer at Grand Victoria phase one in West Kowloon - an oversubscription of about 8 times. The property in Cheung Sha Wan is being developed by Wheelock Properties, Sino Land (0083), K Wah International (0173), Shimao (0813) and SEA Holdings (0251).

CK Asset (1113) will offer a 2,995-sq-ft unit at 21 Borrett Road in the Mid-Levels for sale by tender on Monday.

The developer sold a 3,378-sq-ft penthouse last month at the project with a private pool for HK$459.4 million, or HK$136,000 per sq ft, along with three parking spaces, with the per-sq-ft price hitting a new high among flats in Asia.

〈Asian Post, March 10, 2021〉The land auction and property development system on the mainland is a direct descendant of Hong Kong's. The system, in which the government sells land to developers so they can build homes, has supported rapid urbanisation and improved the living conditions for hundreds of millions of urban Chinese.

But Beijing is also rapidly realising the social costs of the system, including its chronic damage to entrepreneurship, a yawning wealth gap that depresses ambitions of younger generations, and the formation of a rent-seeking landlord social class whose interests are too often at odds with the broader community – the same problems perceived by Beijing as the basis for the social divisions and tensions in Hong Kong.

At the National People's Congress, the central government did not directly spell out its intent to abandon the housing system, but the message was clear that it would not allow what happened in Hong Kong to be repeated in its cities.

"We will strive to meet people's housing needs," Premier Li Keqiang said in the government work report. "We will keep the price of land and housing as well as market expectations stable … we will make every effort to address the housing difficulties faced by our people.

〈The Standard, March 10, 2021〉Hong Kong's housing problem needs to be solved, according to Vice Premier Han Zheng - which commentators take to mean that Beijing will start addressing developers' hegemony.

The top Beijing official in charge of Hong Kong affairs made the remarks during a meeting with the SAR's delegation on the sidelines of the seven-day National People's Congress.

"The housing problem in Hong Kong is related to its history and development. Although it is really difficult to solve the problem, we still need to start the work," Han said.

"If we just lay aside the problem and don't come to a consensus or come up with an idea, especially when there is a solution and the Legislative Council starts a filibuster, Hong Kong people's interests will be harmed."

China watcher and political commentator Bruce Lui Ping-kuen said Han's remarks implied that Beijing will start getting involved in Hong Kong's housing problem.