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Property News Weekly Digest
〈China Daily, Mar 25, 2022〉Fitness centres have lost an estimated HK$1b in revenue as fifth wave of virus forces closures

A recent wave of forced closures of fitness centres is creating vast areas of empty real estate in Hong Kong and driving down rents, according to industry professionals and property analysts.

The amount of space likely to be vacated by gyms and other fitness facilities being put out of business by the fifth wave of coronavirus may reach 350,000 to 500,000 sq ft, according to an estimate by Gordon Yau, chairman of the investigative panel of the Hong Kong Fitness Guide, an industry group launched in 2017.

That is equivalent to almost nine American football fields, or a quarter of the floor space available at the International Finance Centre.

"When the contract is broken [by the tenant], the deposit is irretrievable," Yau said. "Whether the landlord files a lawsuit or not depends on the landlord. Usually they would not waste legal fees to do it. They would rather lease it again quickly."

〈Asian Post, Mar 24, 2022〉Sanctions on Russian oligarchs including Roman Abramovich and Oleg Deripaska may take the heat out of Britain’s luxury property market, but any chill is likely to be temporary, experts have said.

The move against some high-profile billionaires came amid a rebound in high-end transactions around London.

Properties in the city’s most prestigious postcodes have lost one-fifth of their value over the past seven years, according to global real estate services provider Savills, which predicts a return to the peak of 2014 by 2026.

"As the sanctions bite, we are unlikely to see any more Russian oligarchs, or those connected to the Kremlin, join the prestigious ranks of prime London home ownership," said Marc von Grundherr, director of Benham and Reeves, a London-based agency.

"The impact will be temporary as there is an abundance of demand from other international buyers."

〈The Standard, Mar 23, 2022〉Henderson Land Development, one of Hong Kong’s biggest developers, reported a 9 per cent drop in profit to HK$13.6 billion in 2021, worse than the 1 per cent decline forecast by analysts.

Earnings for last year were dented by the absence of a one-off gain from Miramar Hotel and Investment when it became a Henderson subsidiary in 2020, according to a filing with the Hong Kong exchange yesterday.

The developer proposed a dividend of HK$1.30 per share.

An estimate of 10 analysts polled by Bloomberg was for Henderson’s net income to decline to HK$14.6 billion.

Hong Kong’s struggle to contain the fifth wave of the coronavirus and Russia’s invasion of Ukraine, which triggered sanctions that have hit global trade, are likely to deal a blow to the city’s economic recovery, according to a joint statement by co-chairmen Lee Ka-kit and Lee Ka-shing.

〈The Standard, Mar 22, 2022〉Property transactions in Hong Kong have been slack since the fifth wave of a Covid pandemic that has shown no sign of ending any time soon broke out, with both buyers and sellers taking a wait-and-see approach, resulting in a rise in rental-market deals.

Some owners are no longer willing to sell at "pandemic prices" after the relaxation of the mortgage insurance and the interest rate increase, said Dave Ma, Hong Kong Property Services' chief operations officer.

They now prefer to rent homes out first before prices rise again, which has led to a surge in rental-market supply as well as drops in the outlay that tenants have to shell out.

Many tenants are also looking for cost-effective flats while waiting for a better opportunity to buy.

About one third are longing for the resumption of sales of new projects, Ma added.

A 451-square-foot flat at K.Summit in Kai Tak was recently rented out for HK$15,800, or HK$35 per square foot, which a Hong Kong Property Services agent said was 5 percent below the market price.

〈Asian Post, Mar 21, 2022〉Alliance of SMEs calls for show of ‘conscience’ and rent cuts by big players as tenants try to remain afloat amid stringent social-distancing measures

An alliance of small and medium-sized enterprises (SMEs) has called on "hard-hearted" developers and big landlords to restore their "conscience" by offering rent cuts to help struggling tenants ride out the fifth wave of Covid-19 infections.

The group of 320 SMEs, backed by several pro-Beijing lawmakers, made the appeal yesterday, saying many big developers and landlords had refused to help out tenants who were at the end of their tether amid the pandemic.

Sixteen types of premises have been forced to close temporarily since early January under the government’s stringent social- distancing curbs, with some slated to reopen on April 21.

"Many tenants are struggling over whether they should continue their businesses, lay off staff or even shut down their operations to seek a liquidation order. They are really clueless and in deep water," said alliance organiser Stephen Sum Wing-Nin, CEO of estate agency V+ Property Expo.