Hong Kong’s homebuyers turn up in droves in a bout of revenge buying to snap up half of Wheelock’s Monaco Marine flats at Kai Tak

Wheelock sold 238 of the 308 flats at its Monaco Marine project at the former Kai Tak airport as of 9:30pm, with about 13 bids for every available flat, agents said

The first batch of flats released for sale comprised 306 units with between one and three bedrooms, priced from HK$7.96 million to HK$20.4 million (US$2.6 million)

Hong Kong’s homebuyers returned in droves after a three-month hiatus, snapping up almost half of the new flats offered by Wheelock Properties at bargain prices.

Wheelock sold 238 flats, or 77 per cent of the 308 flats on offer at its Monaco Marine project at the former Kai Tak airport as of 9:30pm, with about 13 bids for every available flat. The favourable response would bolster sentiments in the city’s flagging property market amid an economic slump and rising joblessness, agents said.

“The good response today reflects [the fact] that the market does respond well to quality flats in good locations at attractive prices,” property agent said, “I am optimistic about the market’s outlook in the second quarter.”

Wheelock recorded close to HK$3 billion (US$382 million) from its weekend sale. The first batch of flats released for sale at Monaco Marine were launched at an average price of HK$25,788 per square foot, about 12 per cent cheaper than another project in the same neighbourhood that went on sale last summer.

Monaco Marine, due for completion in March 2023, comprises 559 apartments in four residential towers.

The first batch of the flats released for sale comprised 306 units with between one and three bedrooms, ranging from 326 sq ft to 713 sq ft (66 square metres), priced from HK$7.96 million to HK$20.4 million (US$2.6 million), after discounts of up to 12 per cent. Two four-bedroom units exceeding 1,500 sq ft with rooftop patios were also offered.

An estimated 70 per cent of customers were buying for their own use, with investors making up the remainder of the purchases, agents said. That bolstered confidence in the market’s buying power, prompting the agent to forecast prices to rise by between 3 and 5 per cent in the second quarter, recovering from the 3.3 per cent slide in the first three months.

Hong Kong’s property buying power will defy higher interest rates that have been foreshadowed by the Federal Reserve, whose chairman flagged a 50-basis point increase in the benchmark lending rate in May to tame US inflation at 40-year high. Hong Kong’s monetary authority is bound by the city’s currency peg to follow US rate increases in lockstep.

Monetary authorities have flagged six more rate increases this year, with four more in 2023, marking the end of nearly two decades of low interest rates, the fuel that fed Hong Kong’s property bull run.

“While rising interest rates will increase mortgage servicing costs, the rates will still be very low,” the agent said.

The city’s economy, estimated to have shrunk by 2.9 per cent in the first quarter due to tough social distancing measures, may grow by only 0.9 per cent in the second quarter, according to a forecast by the University of Hong Kong released on Friday.

A growth of just 0.5 per cent is tipped for the full year, down from 6.4 per cent last year, the International Monetary Fund said on Tuesday.

The city’s unemployment rate rose to a nine-month high of 5 per cent in the quarter, government data showed. The first round of distancing rules relaxation took effect on Thursday, badly needed for the city’s service businesses such as restaurants, gyms and cinemas to survive.

Sales of newly built homes in Hong Kong slumped 64 per cent in the first three months to a six-year low of 1,679 units, compared with the fourth quarter of 2021, according to Land Registry data.

Close to 4,000 new flats are expected to be released for sale in the three months to June. Some developers have already offered incentives to entice buyers.

The average price of a used flat in Hong Kong retreated by 4 per cent from its peak in September. A market index which is a gauge of lived-in home prices compiled by a property agency, has risen around 1.1 per cent since bottoming out three weeks ago.

The city’s used home sales could reach 3,000 transactions this month, up 20 per cent from nearly 2,500 in March on the back of the pandemic’s retreat and a relaxation of mortgage restrictions on more expensive flats, an agent said on Friday.

(South China Morning Post)

Chelsfield Eyes Hong Kong Opportunities After Opening SG Office Project

After leasing out its most recent Singapore value-add project to Alibaba and its Lazada unit, real estate investment firm Chelsfield Asia is on the lookout for distressed assets in its Hong Kong home base as it gears up for more deals in the region.

Chelsfield Asia chief executive Nick Loup told Mingtiandi that Hong Kong stands out among the fund manager’s top targets in APAC thanks to a growing crop of discounted properties that can be purchased for value-add projects, especially in the hospitality sector.

“We are seeing elements of distress for obvious reasons in Hong Kong and it’s very rare. I have been in Hong Kong since 1993 and you have these cyclical adjustments, (but) what you’re seeing now are very rare,” Loup said in an interview earlier this month. “I think it’s a good time to be looking opportunistically at Hong Kong.

Chelsfield’s interest in Hong Kong hospitality assets follows a string of hotel acquisitions in the city over the last six months by institutional investors including Hines, PGIM Real Estate and Weave Living, with a nearly 50 percent decline in all investment transactions during the first quarter and continuing restrictions on international travel piling pressure on asset owners.

Need for Speed

Loup pointed to a number of factors as contributing to improved conditions for investors looking at the Hong Kong market, with opportunities available across the market, but particularly in the hospitality segment.

“I think it’s not a sector-specific thing, but talking about sectors, clearly the hotel sector has had a really rough time,” Loup said. “Some of the smaller holders of hotel properties that are not backed by big corporations have actually got to the end of the line now and are starting to dispose of assets. That’s quite an active area at the moment which a number of people are looking at.”

Hines chose the hotel sector for its first direct investment in Hong Kong in November last year when the firm acquired the Butterfly on Prat Hotel in Tsim Sha Tsui for a reported HK$925 million ($118.6 million).

PGIM Real Estate followed up two months later with its HK$1.4 billion purchase of a pair of Hong Kong hotels, including the Travelodge Hotel on Hollywood Road in Central, and Weave Living purchased the Rosedale Hotel in Kowloon for HK$1.37 billion.

That string of deals comes as Hong Kong’s overall real estate market fell off of a cliff during the first quarter with the value of total investments dropping by 46 percent compared to preceding three months to total just HK$11.2 billion, according to a recent report by a property agency.

The agency noted that many investors are choosing to keep their money on the sidelines while waiting for market uncertainties to subside, as a combination of the city’s ongoing struggles to achieve its Covid zero goals and the spectre of rising interest rates boost the fear factor.

Back to Hong Kong

Beyond the hotel sector, Loup said that Chelsfield is also seeing opportunities to pick up discounted retail assets, while acknowledging that the path forward for Hong Kong’s shopping economy remains bumpy.

Even under conditions which may give buyers an edge not seen since the global financial crisis, Loup does not see executing a deal in Hong Kong as a sure thing.

“The big listed (local) companies are very well capitalised, (with) low gearing and have plenty of resources. There is also a weight of cash in the market waiting for opportunities,” Loup said. “While there’s a cyclical opportunity, you have to move very quickly to secure something.”

Should the company make an acquisition in Hong Kong it would bring to an end a four-year hiatus from Asia’s most expensive real estate market since Chelsfield tied up with a joint venture between US fund manager Catterton LVMH and Groupe Arnault in early 2018 to purchase a set of retail units in 9 Queen's Road Central in Central for a reported HK$900 million ($115 million).

Shortly before that deal in Hong Kong’s priciest district, Chelsfield had teamed up with local fund manager Pamfleet (now the APAC division of Schroders’ Real Estate) to purchase what is now the Worfu shopping centre in North Point for a reported HK$2 billion.

More Targets

The London-based company is gearing up for its next value-add play after celebrating the official opening of what is now Lazada One in Singapore last week.

After buying what was then the Manulife Centre in 2019 for S$555.5 million (then $408.8 million) in a 50:50 joint venture with ARA Asset Management, the partners are now marketing that property for a reported S$800 million.

That deal, which received a boost when Alibaba and Lazada signed up for more than half of the space in the building, has encouraged Chesfield to look for more assets in Singapore, while also keeping an eye on other major markets in the region.

“Other than (Singapore), we’re keen to get more exposure in Japan – in Tokyo we’re looking at a variety of opportunities there. In China, we continue to believe in the outlook for logistics so we continue to invest in new logistics there and we’re looking at some mispriced opportunities that are starting to trickle through in the Shanghai (Yangtze River) Delta region,” Loup said.

(Mingtiandi)

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觀塘業發工廈強拍底價23億

近年政府加大力度發展九龍東，銳意打造成新一個核心商業中心；其中，觀塘工業區亦隨即起動，由伯恩光學創辦人楊建文併購的觀塘業發工業大廈第一期，最新獲土地審裁處頒下強制售賣令，底價為23.49億，對比2018年4月申請強拍時市場估值約14.09億，高出約66.71%。

據土地審裁處文件顯示，是次獲批強拍令的業發工業大廈第一期，位於觀塘開源道77號，現址一幢樓齡約44年的15層高工廈，當時併購財團持有約84%業權，餘下16%業權則由8名業主持有，最新僅餘下2個物業並未成功收購，該財團由2018年4月至2021年4月期間曾三度向該名小業主出價收購，收購價由5579.42萬逐步提升至8250萬，期內增幅47.86%，惟仍未能成功打動小業主。

可建總樓面約24萬呎

該舊樓地盤面積約2萬方呎，土地用途為商貿地帶，若地積比約12倍重建發展，涉及可建總樓面約24萬方呎，若以強拍底價計算，每方呎樓面呎價約9788元。

值得留意的是，楊建文或有關人士早於2017年12月透過強拍途徑以底價約16.216億、統一毗鄰開源道75號業發工業大廈2期。而該兩幢工廈連同毗鄰的年運工業大廈已於去年向城規會申請合併發展，以重建為一幢樓高39層的商廈，涉及總樓面約72萬方呎。

(星島日報)