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Harbour site valuation expected to drop 20pc

The New Central Harbourfront Site 3's valuation is expected to drop between 15 and 20 percent while home prices will fall by 10 percent this year amid the pandemic and rising unemployment, according to a property consultancy firm.

The commercial plot, which has a site area of 516,312 square feet and a floor area of about 1.84 million sq ft, was valued at HK$40 billion by surveyor two months ago. It was expected to go on sale this quarter.

The downward trend continued in both the residential and investment markets in the third quarter as the pandemic and continuing geopolitical uncertainties continued to weigh on sentiment, the consutlant said.

But riding on the improved sentiment in the residential property market recently, some developers are still raising the prices of their new flats.

Sun Hung Kai Properties (0016) released 65 flats in the first price list of Wetland Seasons Park Phase 3 in Tin Shui Wai, at an average HK$12,968 per sq ft after discounts, about 14 percent higher than the first price list of Phase 2.

The cheapest unit, at 316-sq-ft, was offered at HK$4.13 million, or HK$13,079 per sq ft. SHKP will open show flats of the project tomorrow and expects to launch sale next week.

In Sai Ying Pun, Henderson Land Development (0012) released the sales brochure of Two.ArtLane, providing 264 units.

In the commercial property market, Biel Crystal Manufactory has applied to redevelop Good Year Industrial Building in Kwun Tong into an industrial building of no more than 39 storeys.

The building has a site area of 9,999 sq ft and a total floor area of 143,998 sq ft if the plot ratio is 14.4.

In the secondary market, Telecom Digital (6033) executive director Bobby Cheung King-chuen purchased a 1,699-sq-ft unit at Mont Rouge in Shek Kip Mei for HK$85 million, or HK$50,029 per sq ft.

In Lai Chi Kok, a 564-sq-ft flat at Mei Foo Sun Chuen changed hands for HK$8.2 million, or HK$14,539 per sq ft, after HK$80,000 was cut from the asking price.

And in Sai Wan Ho, a 685-sq-ft unit at Grand Promenade fetched HK$15.8 million, or HK$23,066 per sq ft, after HK$200,000 was cut from the asking price.

(The Standard)

Hong Kong’s hotel investment market reels from coronavirus, protests, with prices tumbling and landlords suing

Only one hotel property has changed hands successfully, albeit at a steep discount, so far this year compared with seven in the first eight months of 2019

‘Why should they buy? They cannot collect rent and would lose money every day,’ agent said

Hong Kong’s hotel investment market is reeling from the impact of Covid-19 on tourism, with only one transaction taking place this year and landlords suing hotels for millions in rent arrears.

Only one hotel property has changed hands successfully, albeit at a steep discount, so far this year compared with seven in the first eight months of 2019. Last year’s total investment volume came to HK$9.9 billion (US$1.28 billion) via 10 transactions, according to property agent.

The city’s tourism industry has been devastated by international travel restrictions, particularly those preventing mainland Chinese visitors from crossing the border. It had already been struggling badly last year when anti-government street protests deterred visitors.

“Coupled with the social unrest, travellers cannot come. Hotels have no business. Occupancy rates are now just at 10 to 20 per cent, with not even enough [revenue] to pay workers,” property agent said. “Even the big hotels incur losses. It is not an isolated phenomenon, but the general market [is like this].”

It is hard for hotel property owners to find buyers at the moment, though if the price is discounted a lot some may be tempted to bet on a potential recovery if the pandemic is resolved within about a year, the agent added.

“Why should they buy? They cannot collect rent and would lose money every day,” agent said. “Buying now is taking a risk. [There is no possibility of getting] a reasonable return immediately after buying.”

ITC Properties Group in late August sold the 94-room Le Petit Rosedale Hotel in Causeway Bay for HK$460 million to Wang Dingben, a non-executive director of the Hong Kong-listed China New Economy Fund, according to ITC’s filing to the stock exchange. The hotel and its holding company incurred a loss of HK$49.24 million for the year ended March 2020.

The price represents a 34.3 per cent discount from the original asking price at HK$700 million, agents said. The price per room, at HK$4.89 million, is 13 per cent below that paid by “shop king” Tang Shing-bor for what is now called the Hotel Ease Causeway Bay, at HK$5.62 million, in September 2017.

“Market recovery will remain slow until essentially the connection with China is re-established,” agent said. “As a result of the events of the last year and with the lack of international visitors, we are seeing a repricing of certain hotel assets.”

Meanwhile, the buyer of the Queen’s Hotel in Sai Wan, Grand Fortune Overseas Holdings, cancelled the HK$310 million deal in late August, less than a month after signing the purchase agreement, losing 10 per cent, or HK$31 million, in deposits, according to agents. The original owner of the Queen’s Hotel once asked for HK$450 million.

The Hong Kong Reese Hotel in Aberdeen on August 25 was sued by landlord Central Well Limited for not paying rent, rates and interest from March to August amounting to HK$16.92 million, according to a writ from the High Court.

It was sued on two other occasions before that, for rent from July last year to February. The landlord has already won a lawsuit for about HK$13.78 million owed between July and November last year. The Reese Hotel did not immediately respond to a request for comment.

The Vela Boutique Hotel in Causeway Bay was also sued by the landlord for rent amounting to HK$20.72 million in June. Vela did not respond to a request for comment.

“I think landlords, hotel owners and hotel operating companies have to work together in partnership to work through this time,” agent said. “Because it’s a challenging market for all parties.”

(South China Morning Post)


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