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Re-Sale | Investment Market #ConventionPlaza
When this transaction closes, a record will have been set for Hong Kong property market for single floor purchase.
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Hong Kong Is A City for Mainlanders to Showcase Their Wealth #Office
Developers On Course
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- Irene Lee, Chair of Hysan Group - Causeway Bay's largest landlord - an 'Establishment' family
- Lincoln Leong - helm of MTRC - an 'Establishment' family
- Top 15 families own 84% of the assets - The Economist
- Hong Kong Retail Sales Plunge Most in 17 years
Residential Market Sales in Hong Kong
- Double Click this Link to View
- $ 79,000+ psf for Gehry-designed Opus - shell only
- Developers offer high financing to clear inventory
- Uncertainty in the short term in the Hong Kong market
Highlights:
- Office market strong
- Significant slowdown by PRC money - due to anti-corruption movement.
- The recent Occupy movement is a problem.
- Causeway Bay landlords now willing to negotiate
- Richmont hit by slow sales in Macau & HK, more than half of Macau's VIP's were government officials
With summer upon us now, it would make sense that people are travelling to the recreation home.
The Hong Kong Advantage
- Global property hotspot - BBC
- Barker Road - $17,000 USD per sq ft
- Vertical Hong Kong - wow photos
- Subway system - most efficient!
- Third fastest growing property market in the World
- $2.5 mln per month rent in Tsimshatsui
Retail Rents in Hong Kong
"HK$11 million per month, or HK$220 psf, for its flagship shop at Lane Crawford House on 70 Queen's Road Central. Burberry splashed out HK$1,540 psf for a 5,000-sq-ft shop at 38 Russell Street in Causeway Bay. And in September, a 36,342-sq-ft shop in Star House on Salisbury Road, Tsim Sha Tsui, was leased out to three high-end retailers for a total of HK$15 million per month". -- The Standard
What makes Hong Kong especially attractive for the Mainland clientele is : So much choice in luxury goods + NO LUXURY TAX ! Home ownership is easy peasy + high rents because such a large expatriate community. There are > 90 investment banks in the city. Hong Kong is IPO Central.
[HONG KONG] Li Ka-shing, Asia's richest man, said his companies have slowed land purchases in Hong Kong and China as prices have escalated to a high level.
"Land prices in Hong Kong are high, and already showing signs of an unhealthy situation," Mr Li said in an interview with Southern Metropolis Weekly. "Land prices in China have surged, and we're unable to win auctions for land."
The comments by Mr Li, who controls Hong Kong's biggest developer, Cheung Kong Holdings Ltd, underline concerns that governments in China and in the city are struggling to tame an asset bubble fuelled by cheap credit. New home prices in October jumped in all but one of the 70 Chinese cities tracked, the National Bureau of Statistics said on Nov 18.
In Hong Kong, home prices remain more than twice as expensive as five years ago, even though they are little changed this year.
- 220 Units Sold on A Weekend
- Slowdown on luxury & large units - just handfull in turnover - maybe less MNC ceo's?
- Rents still high though
PUBLISHED NOVEMBER 04, 2013
Hong Kong luxury home buyers queue amid talk of last hurrah
In a shopping mall in one of Hong Kong's prime retail districts, more than 100 people wait patiently to take a lift to the sales floors - not to buy luxury bags or clothes, but high-end apartments with price tags of up to US$4.4 million
[HONG KONG] In a shopping mall in one of Hong Kong's prime retail districts, more than 100 people wait patiently to take a lift to the sales floors - not to buy luxury bags or clothes, but high-end apartments with price tags of up to US$4.4 million.
Foster Lee, a 30-year-old banker, was among the lucky ones who won the chance to buy a unit after a ballot in which more than 1,600 people signed up for just 80 luxury units on offer.
"I was expecting home prices to fall four years ago and they keep increasing. It really hurts," said Mr Lee, who plans to buy one of the flats offered by New World Development and Wheelock & Company Ltd in the prime location near Kowloon West for his family.
Signs on the ground point to a clear pick-up in demand from local and Chinese buyers, thanks in part to steep discounts offered by developers to offset higher stamp duties imposed a year ago to cool prices that have jumped 120 per cent since 2008.
HONG KONG AS A CONDUIT FOR OVERSEAS PROPERTY FOR PRC PURCHASERS
A salesman shows off a luxury development in London to potential buyers in Hong Kong. Photo: Reuters
On the seventh floor of a luxury hotel in the heart of Hong Kong, a Chinese couple listens carefully as an agent takes them on a virtual tour of an upmarket property development for sale - not in the former British colony, but in London.
Cash-rich mainland Chinese, who some in Hong Kong blame for pushing property prices to record highs, have fled the city’s real estate market, scared off by cooling measures that have sent them scouring overseas for better options.
For many, the search starts in the ballrooms of Hong Kong’s luxury hotels which host overseas property fairs nearly every weekend, offering prospective buyers a glimpse of homes abroad while providing refreshments such as sparkling water and the bite-sized Cantonese snack dim sum.
“We can only see pictures of the project now so that’s why we have to go to London to take a look at the environment of the building,” said Christina Chen, who flew with her husband from Shanghai to Hong Kong to check out plans of a development at London’s Olympic Park before flying there herself to see it.
“The return on investment is much higher in London than in China and Hong Kong,” she said in a room at the Landmark Mandarin Oriental, a popular choice for property exhibitors.
Mainland Chinese accounted for 18 per cent of new luxury home sales in Hong Kong in the first quarter - the lowest level in four years - down from 43 per cent in the third quarter of last year, before cooling measures were announced, according to real estate company Centaline Property Agency.
Hong Kong, where property prices are among the most expensive in the world, has imposed a series of tightening steps since October, including a 15 per cent tax on foreigners that many industry watchers believe was targeted at mainland buyers.
“Mainland Chinese have lost the ticket to buy properties in Hong Kong, now that tightening measures are in force,” said David Hui, overseas sales director at Centaline. “If they want to invest in property, they now need to go overseas.”
The flight abroad has taken them increasingly to Britain and the United States, where Chinese rank alongside Canadians as the fastest-growing group of buyers, data from the US National Association of Realtors shows.
In London, overseas buyers accounted for 2.2 billion pounds (HK$26.3 billion) worth of new-build property last year, up from 1.8 billion pounds (HK$21.5 billion) in 2011, according to estate agent Knight Frank. Buyers from greater China are among the top three.
The search for homes has accelerated, with Hong Kong’s overseas property transactions jumping nearly 50 per cent in May from a year earlier - of which mainland Chinese made up a fifth of sales, according to two property agents in the city.
More than 40 offshore projects are on offer in Hong Kong this month, most with price tags below HK$7 million, with lawyers and bank representatives on hand for quick sales.
Cherrin Lo, director of international residential sales at property consultant Savills, said she expected the number of overseas projects on show in Hong Kong this year to jump 30 to 50 per cent from a year earlier.
Another popular choice is Vancouver, where about 25 per cent of the city’s more than 600,000 residents speak Chinese as a first language. Sun Hung Kai Properties, Hong Kong’s largest developer, sold almost 90 per cent of units on offer in Hong Kong for its River Green project in the Canadian city suburb of Richmond, B.C. within a month when it debuted last month.
About half of those sales went to Chinese buyers, according to Centaline Property Agency.
With a significant drop in mainland Chinese buyers, Hong Kong developers have shifted their focus back to local end-users, with some cutting prices to lure buyers.
In May, the number of Hong Kong property transactions stood at its second lowest in 16 months, up 20.5 per cent, according to Centaline Property Agency.
Analysts expect the city’s developers, including Cheung Kong (Holdings), controlled by the city’s richest man Li Ka-shing, to cut the premium - the difference between new launches and second-hand homes - of new projects by 15 to 20 per cent this year to attract local buyers.
“The local market is our new focus,” said Billy Chan, an agent at Hong Kong Property Services. He has sold just one residential unit this year - to a local buyer - compared with 10 last year, half of which went to mainland Chinese buyers. “We don’t have much opportunity from Chinese buyers now,” Chan said.
-- 2013 June 25 SOUTH CHINA MORNING POST
RECORD SETTING RENTAL
Opus, the new 12 storey Swire properties development on Stubbs road in the Mid-Levels achieved an unusually high monthly rental of HK $724,000 - rented to the British Cousul General -- 2013 July 3 SOUTH CHINA MORNING POST
RETAIL IN HONG KONG
McDonald's in Russell Street in Causeway Bay is cashing in its chips after another retailer agreed to pay triple the rent. Photo: May Tse
McDonald's loses prime slot in Causeway Bay to Sa Sa make-up chain
The Big Mac has been priced out of Hong Kong's most exclusive shopping strip to make way for yet another retailer eyeing the wallets of cashed-up mainlanders.
Despite McDonald's being the world's largest chain of hamburger restaurants, it still could not afford the rents in Causeway Bay's Russell Street, and has been forced to move out.
Operated by McDonald's Corp, the restaurant opened on the first floor of 8 Russell Street in 2006.
Executive director of the landlord, Emperor International, said the 6,000 square feet shop had been leased to Sa Sa International Holdings for HK$1.58 million a month. Sa Sa will move out in October.
The rent is more than three times higher than the existing monthly rent of HK$500,000 paid by McDonald's, which signed a lease two years ago.
Director of retail services at CBRE, said: "Retailers such as luxury watch and jewellery stores who are targeting mainland shoppers are eager to move into the street, as it has become the most famous shopping street to mainland tourists. [Luxury retailers] are willing and able to pay rent of HK$1.6 million for a shop in the street. Other retailers are able to afford a monthly rent of only up to HK$900,000, so it is inevitable that other non-luxury goods tenants have to move out."
Lin said retail rents in Russell Street have jumped sevenfold since the Individual Visit Scheme, allowing mainlanders to visit the city, was launched in 2003. By last year, the average rent of street-level shops on the street surpassed Fifth Avenue in New York, making it the most expensive shopping street in the world, according to Cushman & Wakefield.
Fifteen of the 28 stores on the street are sellers of luxury watches and jewellery. Including retailers of cosmetics, a money exchange, high-end fashion and luxury accessories, there are 24 stores targeting mainland shoppers. Only four shops do not rely on mainland tourists.
Lai Wing-to, a veteran property investor who owned a shop in Russell Street, said: "The retailers open these shops as a way of advertising their brands, and they are also able to generate profit. In the last few years, it has been common to see mainlanders buying dozens of watches."
Lin said the non-luxury retailers who are not reliant on mainlanders may generate only moderate profit and may have difficulty affording expensive rents.
McDonald's is an example. A Big Mac meal cost HK$21. Even if McDonald's paid no other operating expenses, it would have to sell one Big Mac meal every 35 seconds every 24 hours to pay a monthly rent of HK$1.58 million.
Beijing's anti-corruption campaign and the economic slowdown on the mainland have meant that local sales of luxury goods have decreased significantly since early this year. But retail rents are expected to stay firm in the short term.
Cheung said there were hundred of international brands in the world and many of them were interested in expanding in Hong Kong. "But the growth in the rent will slow," he said. "We won't see a 20 per cent growth a year as we saw over the last few years. It will be flat, as rents have increased a lot over the last four years."
Lin said: "Even if the overall retail rents turn flat or fall, the rents in Russell Street would be the last to suffer."
Hong Kong has a well-earned reputation as Asia’s shopping capital and the continent’s most vibrant real estate market, but there are creeping anxieties that mainland China’s flagging economy could impact on the territory’s fortunes.
There are no signs of a slowdown when it comes to retail rents.
In recent weeks, the McDonald’s restaurant on Russell Street, the most expensive shopping street in Hong Kong, was forced to close after its rent trebled to HK$1.58 million (€154,000) a month.
The South China Morning Post newspaper ran a story harking back to when the US chain opened its first Hong Kong outlet – just around the corner from Russell Street, in Paterson Street, back in 1975.
The rent back then was HK$64,500 (€6,280) per month on a 3,000 sq ft ground-floor space next to the Japanese department store Matsuzakaya, which is less than a small apartment in Mid-Levels would set you back now.
The newspaper quoted an estimate by a senior director of retail services at property consultant CBRE, which reckoned a similar space today in the Hang Lung Centre would cost as much as HK$3 million (€292,000) per month, or the equivalent of 156,250 Big Macs.
The McDonald’s on Russell Street is being taken over by the cosmetics chain Sa Sa, which will pay will pay HK$263 (€25.61) per square foot in rent on the 6,000sq ft space.
The Sa Sa chain sells cut-price cosmetics and is a huge hit with mainland Chinese shoppers. During a visit to a Sa Sa last week, the scented air was full of the Mandarin Chinese spoken by northern Chinese, with only the merest whiff of Cantonese, the dialect of Chinese spoken in Hong Kong.
All of the salespeople were able to speak fluent Mandarin, much more so than English.
While it is normal for fast-food businesses to be pushed out by high-end retailers who want to snap up top locations, it is “quite unhealthy in Hong Kong that the rental growth rate in prime retail streets is largely determined by the consumption pattern of mainland Chinese tourists, as Hong Kong residents don’t play any role here,” Mr Lin told the paper.
“No other cities in the world are like Hong Kong, where the high-street retail rent is affected by the consumption pattern or the number of tourists from a single country.”
Annual decline
Yearly rental costs are much higher in Hong Kong than in New York, and more than four times higher than in London, according to CBRE Research.
Still, the broader expectations are for retail rents to post their first annual decline since 2008 this year, as mainland Chinese shoppers spend less on luxury fashion and goods.
Prime street retail rents in Causeway Bay, home to the world’s most expensive shopping precinct, are expected to fall 4 per cent in 2013, a Hong Kong-based executive director for retail at Cushman & Wakefield, told a briefing.
Retail rents in the central business district are expected to fall 3.5 per cent, she said.
The Hang Seng property index of landlords and developers has fallen sharply in the last quarter.
Mainland China’s economy grew 7.5 per cent in the second quarter from a year earlier, slowing for a second straight period, and there is also a government clampdown on spending on luxury goods by officials.
There are plenty of fears about a property slump. Residential mortgage debt accounts for around 46 per cent of Hong Kong GDP.
Despite the gloom and the slowdown on the mainland, for the time being at least, Hong Kong’s retail sector is proving robust.
Total retail sales value rose 14.7 per cent year-on-year in June to HK$39.9 billion (€3.89 billion), as tourism continues and local consumers keep shopping.
For the first half of 2013, total retail sales climbed 15 per cent in value and 14.4 per cent in volume over the same period a year earlier.
But there were declines in some areas. The sales volume of motor vehicles and parts fell 14.8 per cent, followed by sales of electrical goods and photographic equipment, down 11.8 per cent, furniture and fixtures down 3.6 per cent, and food, alcohol and tobacco 2.8 per cent.
http://www.irishtimes.com/business/economy/world/hong-kong-retail-rents-starting-to-look-oversold-1.1485242
The Big Mac has been priced out of Hong Kong's most exclusive shopping strip to make way for yet another retailer eyeing the wallets of cashed-up mainlanders.
Despite McDonald's being the world's largest chain of hamburger restaurants, it still could not afford the rents in Causeway Bay's Russell Street, and has been forced to move out.
Operated by McDonald's Corp, the restaurant opened on the first floor of 8 Russell Street in 2006.
Executive director of the landlord, Emperor International, said the 6,000 square feet shop had been leased to Sa Sa International Holdings for HK$1.58 million a month. Sa Sa will move out in October.
The rent is more than three times higher than the existing monthly rent of HK$500,000 paid by McDonald's, which signed a lease two years ago.
Director of retail services at CBRE, said: "Retailers such as luxury watch and jewellery stores who are targeting mainland shoppers are eager to move into the street, as it has become the most famous shopping street to mainland tourists. [Luxury retailers] are willing and able to pay rent of HK$1.6 million for a shop in the street. Other retailers are able to afford a monthly rent of only up to HK$900,000, so it is inevitable that other non-luxury goods tenants have to move out."
Lin said retail rents in Russell Street have jumped sevenfold since the Individual Visit Scheme, allowing mainlanders to visit the city, was launched in 2003. By last year, the average rent of street-level shops on the street surpassed Fifth Avenue in New York, making it the most expensive shopping street in the world, according to Cushman & Wakefield.
Fifteen of the 28 stores on the street are sellers of luxury watches and jewellery. Including retailers of cosmetics, a money exchange, high-end fashion and luxury accessories, there are 24 stores targeting mainland shoppers. Only four shops do not rely on mainland tourists.
Lai Wing-to, a veteran property investor who owned a shop in Russell Street, said: "The retailers open these shops as a way of advertising their brands, and they are also able to generate profit. In the last few years, it has been common to see mainlanders buying dozens of watches."
Lin said the non-luxury retailers who are not reliant on mainlanders may generate only moderate profit and may have difficulty affording expensive rents.
McDonald's is an example. A Big Mac meal cost HK$21. Even if McDonald's paid no other operating expenses, it would have to sell one Big Mac meal every 35 seconds every 24 hours to pay a monthly rent of HK$1.58 million.
Beijing's anti-corruption campaign and the economic slowdown on the mainland have meant that local sales of luxury goods have decreased significantly since early this year. But retail rents are expected to stay firm in the short term.
Cheung said there were hundred of international brands in the world and many of them were interested in expanding in Hong Kong. "But the growth in the rent will slow," he said. "We won't see a 20 per cent growth a year as we saw over the last few years. It will be flat, as rents have increased a lot over the last four years."
Lin said: "Even if the overall retail rents turn flat or fall, the rents in Russell Street would be the last to suffer."
2013 ASIA FINANCE:
Cheung Kong Centre
Cheung Kong Centre owned by Hutchison Whampoa.
The Li Ka-shing Unity Trust owns 39.43 per cent of Cheung Kong, which in turn owns 52.45 per cent of Hutchison according to Bloomberg. So the trust has an indirect 20 per cent in this building
MANULIFE ACQUIRES AN OFFICE BUILDING IN HONG KONG
2013 Toronto-based financial services company Manulife (International) Limited has signed a sale-and-purchase agreement with Wheelock Properties Limited of Hong Kong to acquire the West Tower in the Kowloon East area of Hong Kong for CAD$588 million, marking the largest single office tower purchase in Kowloon. Wheelock is expected to complete construction of the property by the end of 2015. The 21-storey tower, with a total of approximately 512,000 square feet, will serve as the headquarters for Manulife's Hong Kong operations.
Socialite sells her haunted house after slashing price
The haunted home at Broadview Villa in Happy Valley owned by the Queen of Timepieces Christie Wo Man-shan has been sold after the price was cut.
Socialite Wo, founder of the watchseller Charmonde Luxury, managed to offload her 2,853-square-foot unit on Broadview Road only after cutting the price by about HK$5 million to HK$60 million.
That is 40percent lower than similar- sized units at the development.
The transaction will provide cash for Wo, who has failed to pay nine months' rent for a shop at No9 On Lan Street in Causeway Bay. The owner of the shop has filed a lawsuit.
Wo earlier raised the asking price for the flat to HK$65 million from HK$58 million last November after a buyer forfeited a deposit.
The apartment became a haunted home seven years back when Wo's mum jumped from the building at No20 Broadwood Road.
Meanwhile, another haunted home at the Caribbean Coast in Tung Chung was sold for HK$5.87 million yesterday - 25percent below the market price. - 2013 July 22, 2013
ARTS
National Arts Centre Orchestra to tour China and Hong Kong in fall
Canada's National Arts Centre Orchestra (NAC), led by Music Director Pinchas Zukerman, will tour China and Hong Kong for the first time in its 43-year history from October 4-20, 2013.The orchestra will travel to seven cities including: Hong Kong, Guangzhou, Chongqing, Fuling, Tianjin, Beijing, and Shanghai, and perform eight major concerts with more than 80 education and outreach activities and five international broadband videoconference events linking young musicians in Canada and China.
A key tour highlight will be the opening concert in Hong Kong, which will bring two great orchestras, the NAC and the Hong Kong Sinfonietta, with more than 130 musicians together for the first time.
Information summarized from: National Arts Centre Press Release
A key tour highlight will be the opening concert in Hong Kong, which will bring two great orchestras, the NAC and the Hong Kong Sinfonietta, with more than 130 musicians together for the first time.
Information summarized from: National Arts Centre Press Release
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