Hong Kong’s Mid-Levels rents slashed. Is city’s luxury property set for a historic rout?

Is Hong Kong’s luxury residential market set for a historic rout in the months ahead?

Last week, a 5,630 sq ft duplex unit on the 50th and 51st floor of Arezzo development at 33 Seymour Road in Mid-Levels was leased for a monthly rent of HK$100,000, according to the city’s Land Registry. The HK$17.80 per square foot price tag is half the average rate on small and medium-sized homes in the city tracked by property agency.

The eye-catching transaction in the property owned by Taiwanese actress Wu Pei-chi, suggests the rates have crashed. Others dismissed it as an anomaly, or a “mate’s rates” deal.

One thing is for sure, the city’s recession-hit economy is about to be roiled by another round of political turmoil, casting a pall on the industry. Over the past 12 to 18 months, trade war, social unrest, and the coronavirus pandemic have combined to erode high-end rents by 15 per cent in the city, according to property agency.

Now, the national security law is raising serious questions about its status as a hub for multinationals and banks, which traditionally provide the city’s landlords with a rich pool of renters among their expatriates and other high-earning executives.

“The downward trend will continue for a while because at the moment, we do not see many positive supporting factors in the leasing market,” property agent said.

Like other parts of the property market, Hong Kong has become a tenants’ market. Even the budgets for high-end renters are being squeezed as companies trimmed costs during the economic slump. Owners appear to be prepared to cut rents, rather than selling their assets at a loss, according to property agency.

The agent has seen people downgrading from monthly rents of HK$200,000 and HK$300,000 to the HK$100,000-HK$150,000 bracket, or even to the sub HK$100,000 levels.

The slower demand for leasing in luxury residential properties is likely to also pressure capital values, he added, Many of these properties are held as long term investments and the decline of rents is eroding the expected return.

The capital values of luxury residential properties fell by 8.6 per cent from the highest in the second quarter of 2019, according to a property agency report published last month. The agent said the decline has reached 15 per cent based on his observation over the past 12 months.

Arezzo is a 48-storey development by Swire Properties in 2014. There are three flats on each floor, and served by three passenger lifts and one service lift per floor. The transaction in mid-June raised eyebrows because the rate was a deep discount to the going rates of HK$55 to HK$82 per square foot, based on online listings at squarefoot.com.hk.
“This is obviously not a market-based rental as it was leased to a friend on ‘mate's rates’ so it's not reflective of the market,” another property agent said, pointing to other better indicators. “It will have no impact on the neighbourhood.”
Still, rents are on a slippery slope.
For example, a 2,777 sq ft flat at 3 Headland Road in Repulse Bay was rented out at HK$190,000 per month in April, or HK$68.40 per sq ft, according to property agents who declined to be named because the information is private. The rate was 36 per cent lower than the previous lease, according to agents.

For another, a 2,742 sq ft house at 66 Deep Water Bay was recently leased out at a monthly rate of HK$200,000, or HK$72.90 per square foot, reflection a 29 per cent slide from the previous lease.

Prices for such high-end residential homes could drop by another five to 10 per cent in the near future, the agent said.

(South China Morning Post)

火炭區集工業住宅發展一身

火炭工業區屬於新界區規模比較大的工業區之一，近年政府及私人發展商在區內發展多個住宅項目，涉及近9,000伙，但區內仍然工廈林立，並且將有新的工業地推出，令該區住宅及工業區的定位變得含糊。

松頭下路與桂地街地 估值逾33億

作為新界傳統工業地區之一的火炭，面積達30公頃，屬於新界區其中一個比較具規模及早期成熟的工業。而據規劃署《2014年全港工業用地分區研究》，區內共有45幢工廈，一般樓齡逾30年以上，其餘一半則介乎15至30年樓齡，反映區內工廈有老化迹象，但由於近8成的工廈屬於分散業權，要重建轉型的困難頗大。同時，由於區內空置率低至約1.5%，遠低於新界區工廈的平均約3.5%，因此當局在幾年前決定維持工業區的定位。

政府更在今季推出一幅松頭下路與桂地街交界的工業用地，該地前身為停車場空地，鄰近晉名峰及九巴車廠停車場，預計將於下月初截標。該地皮佔地約9.9萬平方呎，地皮呈梯形形狀，預計最高可建樓面近94.2萬平方呎，市場估值介乎33億元至38億元不等，每平方呎樓面地價約3,500至4,000元，屬於火炭區多年來再度有工業地皮推出。

房委3項目 涉6482伙

政府在火炭再推工業地的同時，房委會近年在區內卻有3個公營房屋項目，合共涉及6,482伙，包括納入2019年居屋的旭禾苑(涉830伙)，以及現時借用作隔離營的公屋駿洋邨(涉4,846伙)，前者原本是火炭平房區舊址，之後才由工業地改劃成住宅發展。至於將於今年推售的新居屋彩禾苑則位於禾上墩街，提供806伙，與近日被政府用作「檢疫中心」駿洋邨僅一街之隔，每層約有3伙屬「三房兩廁」間隔，提供較多大型單位，估計售價由約252萬元至約489萬元，平均每平方呎售價約為7,550元。

另一邊廂，鄰近港鐵火炭站旁的前惠康貨倉項目，亦獲中資財團中洲申請，連同火炭站及坳背灣街巴士站用地，一併發展成約2,443伙的大型私人住宅項目。當中中洲涉及的第一期項目，已經在2017年完成約35.8億元補地價，獲批興建為4幢樓高40至46層的住宅樓宇，將提供約1,296伙，其中7成為430至750平方呎的中小型戶。

火炭工業區雖然出現不少公私營住宅發展項目，但由於區內仍然工廈林立，再加上政府再推工業地，相信短中期內工廈及住宅混雜的情況都不會改變，未來發展定位將會更為含糊。

(經濟日報)

長沙灣工廈申重建 提供21萬呎

活化工廈政策吸引財團重建物業，第一集團旗下的長沙灣大南西街項目申請重建，擬建一幢29層高的新式工廈，提供約21萬呎樓面。該物業為第一集團於2018年以12.5億元購入。

物業位於大南西街1016至1018號，地盤面積約1.48萬平方呎，申請人擬略為放寬地積比率限制，以不高於14.4倍地積比率重建一幢新式工廈，重建後可提供約213,966呎樓面，申請人指，項目將提供垂直綠化供大南西街及永康街途人觀賞，並於二樓平台及天台提供綠化空間作舒適開放空間，減低社區溫室效應。

(經濟日報)