Leading today’s Hong Kong real estate news, a retail unit in Central was sold for HK$15 million — 50 percent below the original asking price. Also in the headlines, watch maker National Electronics Holding acquired a luxury house in Deep Water Bay for HK$170 million explaining the deal as part of a mission to expand the firm’s property portfolio.
In Cheung Sha Wan, a URA redevelopment project received 17 tenders at the same time that reports from some of the world’s largest property agencies show the damage suffered by the city’s property markets during the fourth quarter.
A street front shop in Central has changed hands for HK$15 million ($1.9 million) after the seller lowered the price 50 percent from the original target, according to a local media report this week. Perfect Land Investment Limited sold the 420 square foot (39 square metre) ground floor unit at 18A – 18B Peel Street for the equivalent of or HK$35,700 per square foot. The company had originally acquired the shop in Fu Chi House in 2015 for HK$24 million, or HK$9 million more than it was able to recoup through the sale. Currently, the retail space is leased to a food store for HK$30,000 per month, which indicates a 2.4 percent of rental yield.
A real estate agent cited in the media account said that the lack of inquiries and the recent market reversal had dampened the confidence of the seller to the point that they agreed to the cut rate transaction. Read More>>
Watch maker National Electronics Holding has splashed out HK$170 million, or HK$57,842 per square foot, for a luxury house in one of Hong Kong’s most prestigious enclaves. The company bought the 2,939 square foot house at 39 Deep Water Bay via a tender earlier this month, according to a Hong Kong stock exchange filing released on April 3.
HGL Investment Limited, a locally registered investment firm owned by textile giant Lui Pui On and Hon Kwan Yee, Gloria had acquired the house for HK$136 million in 2010, indicating a capital gain of HK$34 million, with the sale taking place via a private tender managed by CBRE. The buyer said in the filing that this acquisition could be beneficial for it’s group “to enlarge its properties portfolio with high quality assets”. Read More>>
Some of Hong Kong’s largest developers, including Henderson Land, Wheelock and Sino Land joined the bidding for a residential redevelopment project in Cheung Sha Wan, showing the city’s virus downturn hasn’t killed off the appetite for land.
The Urban Renewal Authority (URA) on 7 April said that it had received 17 bids from 36 tender invitations with listed developers, Chevalier International, Emperor International, Wing Tai Properties, Lai Sun Development, Far East Consortium International and K&K Property, also joining the bidding, according to a local media report today.
The residential project at the intersection of Tonkin Street and Fuk Wing Street in Kowloon covers a 13,649 square feet site and is designated for redevelopment into as many as 175 new homes by no later than 2024. Read More>>
Property Agencies Reveal Office Market Retreat
The Covid-19 pandemic continues to batter Hong Kong’s prime office market along with the broader economy, with vacancy climbing to a 10-year high of 10 percent by the end of March, according to a report published this week by Cushman & Wakefield.
The property consultancy found that office rents fell by 4 percent in the Greater Central area during the first quarter of this year, with the nearby Wanchai to Causeway Bay submarket suffering an even steeper drop of 5.2 percent compare to the previous three-month period.
The property consultancy added that the grade A office market suffered from negative net absorption of 524,947 square feet during the period from January through March — hitting an 18-year low.
A competing report from Savills indicated that only bargain-hunting investors are left in the office market, with some said to be targetting bargain deals at rates 30 percent below previous market prices.The average prices of grade A offices in Central dropped by 11.5 percent in the first quarter of 2020, while the general market declined by 4.1 percent in the same period.
The COVID-19 pandemic, which has pushed Hong Kong’s unemployment rate to a nine-year high, will put further pressure on housing prices in the city after they took a hit from the social unrest last year, according to market observers.
“As recession in Hong Kong deepens, higher unemployment will likely erode housing demand as some prospective buyers retreat, while more owners may choose to sell, tilting the market dynamics to favour buyers more,” said Nelson Wong, head of research at JLL in Greater China. Read more>>
With home sales in some of the world’s biggest property markets taking a hit from coronavirus lockdowns, global developers continue to target Hong Kong buyers with a promise of high returns on international properties.
The strength of the Hong Kong dollar versus other Asian currencies during the current economic crisis is seen as providing fresh impetus for the city’s home-hungry investors to seek bargains online.
Terence Law, senior project director at Centaline Property Agency told the SCMP that a 550 square foot flat in Sydney costs only HK$3.5 million and can provide a 2.5 percent rental yield if leased out, due to low vacancy rates and surging demand from expats in Australia’s most international city. Read More>>
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