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Property News Weekly Digest
2022/3/19
〈The Standard, Mar 19, 2022〉The compulsory closure of fitness centres has been in effect for 70 days and is expected to last at least 104 days in all. Since the pandemic began, there have been a total of over five months of forced closures in previous waves, and the longest stretch we have been allowed to do business in the last two years is about 10 months.

Online classes are out of the question. We mainly teach pole dancing and aerial arts, and the number of students that have the proper set-up to do this at home is negligible.

We have had no choice to put all our staff on non-paid leave. We have no idea if they will return as some have had to find other jobs or have left the city.

Rent alone accounts for half of our normal expenditure. That is the cost of doing business in Hong Kong, and one we have managed to make work during normal times. How we are supposed to make it work under the current restrictions is anyone’s guess.

〈The Strait Times, Mar 18, 2022〉Interest rate hikes by the United States, in addition to the uncertainty introduced by Russia's invasion of Ukraine, are stoking fears that economic growth may suffer while inflation may continue to rise.

While the price shock from the war in Europe and sanctions against Russia are still working through the global markets - boosting volatility across stocks, bonds and commodities markets - the possibility of a policy error by the world's most influential central bank may prompt investors and businesses to put their investment plans on hold.

Market speculation is focused on how far the US Federal Reserve, which was most likely to raise its benchmark rates yesterday, is prepared to go to bring inflation under control.

A 25 basis-point increase may be appropriate to consolidate the economic recovery from the Covid-19-induced downturn, but too little to have an impact on inflation, which in the US is running at the fastest pace in four decades.

〈Asian Post, Mar 17, 2022〉Hong Kong’s private commercial landlords are joining other major developers in offering rent relief to their tenants.

Tai Hung Fai Enterprise, a property developer with more than 1,000 tenancy agreements around Hong Kong, including offices, serviced flats, warehouses and about 200 shops, said it would help its tenants, who are its "bread and butter".

"We will work out a solution with tenants on a case-by-case basis," said Edwin Leong Siu-hung, the developer’s founder.

Instead of purely cutting rents, he said a temporarily lower base rent and higher turnover rent, such as 30 per cent to 35 per cent of sales, would be a solution that is fair to landlords and tenants. Base rents are fixed, but turnover rents are based on sales revenue.

Hong Kong’s fifth wave of the Covid-19 pandemic has plunged the city into an unprecedented crisis, and Tai Hung Fai’s relief offer comes after MTR Corporation – the city’s sole transit operator and owner of significant commercial property – said last month it would offer concessions across the 97 subway stations and 13 shopping centres it owns.

〈Asian Post, Mar 16, 2022〉An exodus of expatriates from Hong Kong is adding to pressure on the city’s housing market, which is already struggling with draconian Covid-19 restrictions and a slumping stock market.

In Tseung Kwan O, Sai Kung and Kennedy Town, more advertisements are citing "emigration" or "urgent sale" as reasons to exit the market, while prices in Tung Chung, an area favoured by airline staff owing to its proximity to the international airport, have weakened by 5 per cent since the Lunar New Year, according to Centaline Property.

A Cathay Pacific Airways cabin attendant last week sold her 388 sq ft flat at Coastal Skyline in Tung Chung for HK$5.88 million to return home to India. The transaction marked the lowest price for a one-bedroom unit in the housing estate since June 2021.

"The buyer was optimistic about the housing market and bought it for leasing," said Tommy Wong, principal district sales manager at Centaline Property Agency.

Prices in Tung Chung may fall by another 5 per cent up to June, Wong said. About 10 foreign clients sold their homes or had leases expire in Tung Chung last month, he added, contributing to a more than 10 per cent jump in transactions there since the Lunar New Year, he added.

〈The Standard, Mar 15, 2022〉Edward Wong Kwong-wing, known as the "small-house king," and district councillor Ching Chan-ming have been charged for conspiracy to defraud the Lands Department over a Yuen Long small-house estate development project.

The Independent Commission Against Corruption said Wong's company, Wing Smart Construction, allegedly received more than HK$1 billion for the sale of 115 homes in the private estate over 14 years between 2005 and 2019.

Wong, 72, a solicitor who is the operator of Wing Smart, and Ching, 65, a Yuen Long district councillor and an indigenous inhabitant representative of Shui Tsiu San Tsuen, jointly face one count of conspiracy to defraud.

They appeared at the Eastern Magistrates' Courts yesterday before magistrate Leung Ka-kie for mention. They did not enter a plea.

Leung adjourned the case to July 25 to allow the prosecution to further investigate and seek legal advice.

Wong was granted a bail of HK$500,000 and Ching HK$200,000. They are not allowed to leave Hong Kong and need to surrender their travel documents. They are also required to reside at a stated address and report to a police station twice a month. They cannot approach witnesses for the prosecution.