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Property News Weekly Digest
〈The Standard, Dec 5, 2020〉Hong Kong's retail market is expected to rebound in the first half of next year, Morgan Stanley said, as high and low-end retail shop shares will outperform those in between.

Morgan Stanley also predicted office rents will bottom out during the second half of next year.

It raised the rating of Fortune Reit (0778), Hysan (0014) and the Link Reit (0823), with the Reit's target price rising 11 percent to HK$78.

The bank took a positive view on Harbour City and Times Square operator Wharf Real Estate Investment Company (1997), as it may benefit from a pickup in luxury retail sales.

〈Macau Post, Dec 4, 2020〉Tony Wong Secretary for Social Affairs and Culture Elsie Ao Ieong U says that the government expects a high-rise rental housing project for senior citizens in an area of Plot P in Areia Preta district – the plot of the ill-fated Pearl Horizon residential project – to be completed in 2023, in which case seniors would be able to move into the flats in 2024.

The policy secretary also says that the government's decision to commission private social service organisations to run the building's social service facilities would be an effective model.

Ao Ieong made the remarks during Wednesday's Q&A session in the legislature's hemicycle about her portfolio's policy guidelines for next year.

The rental housing project for seniors on Plot P was first proposed by Chief Executive Ho Iat Seng in his 2020 Policy Address which he delivered in April, when he said that the new project aimed to help senior citizens living in low-rise walk-ups improve their living quality. Ho said in April that under the scheme, senior citizens could rent out their flats in walk-ups so that they could move to the flats in Plot P equipped with lifts and use the money they receive from renting out their walk-up flats to cover the rents for their studio units in the Plot P building, and therefore they could have their living quality improved.

〈Asian Post, Dec 3, 2020〉A mainland developer paid more than expected for a residential plot at Hong Kong's former airport, the first such sale by the government at Kai Tak this year.

China Overseas Land & Investment, the mainland's seventh-largest developer by sales, bid HK$4.27 billion for Area 4E Site 1, measuring 59,719 sq ft, in Kai Tak, the Lands Department said yesterday. The price for the site, which can yield up to 328,453 sq ft in gross floor area, works out to HK$13,009 per square foot. It is the developer's third wholly owned site in Kai Tak since plots were first offered for tender in 2013. It also has stakes in four other sites.

"The winning bid was higher than expected, which shows that some developers still have confidence in the residential market outlook, especially the future development of the Kai Tak district," said Thomas Lam, executive director at Knight Frank.

"It may also be that some of the Chinese [developers] need to replenish land reserves, so they may have bid higher."

Amid a general decline in land prices, the market valuation of the plot had ranged from HK$3.28 billion to HK$3.94 billion, or HK$10,000 to HK$12,000 per square foot. Land prices at Kai Tak had peaked at HK$19,636 per square foot in May last year, when a consortium of six developers won a site which can yield a gross floor area of 641,168 sq ft.

〈China Daily, Dec 2,2020〉One week after Chief Executive Carrie Lam Cheng Yuet-ngor announced that the government had identified enough land to address the city's public housing shortage, new official figures show that only a quarter of the necessary units can actually be provided in the next four years.

Politicians have wondered aloud whether the promise in Lam's policy address to solve the city's acute housing shortage within 10 years was feasible.

Yesterday, the Transport and Housing Bureau provided lawmakers with the figures surrounding the 10-year timeline for tackling the housing problem, acknowledging that there were indeed uncertainties ahead.

In her address, Lam said some 330 hectares of land had been earmarked for more than 316,000 public housing units over the next decade, meeting the 10-year supply target laid out in an existing long-term housing strategy.

But according to a paper prepared by the housing bureau, only around 87,300 public housing units - including ones for rent and subsidised sale - will be produced between 2021 and 2025, meeting 28 per cent of the 10-year target.

"Forecast of housing production is subject to uncertainties," the bureau said in the paper.

"While the timetable of projects within the five-year period from [2020 to 2025] is usually more certain as relevant consultation and planning processes of most projects have been completed, the exact completion time for individual projects will still be subject to changes," it added, pointing to a delay at a 2,000-unit project in Pak Tin last year.

〈Asian Post, Dec 1, 2020〉Shenzhen, the crucible of China's economic reforms and the nation's technology hub, is seeing a buying frenzy in residential property, as a government-imposed price cap has created arbitrage opportunities for speculators to make quick profits.

At CR Land's CR City project in Nanshan district, the average price capped at 130,000 yuan (HK$153,140) per square metre was 28 per cent lower than the neighbourhood's prevailing market price. That attracted more than 10,000 bidders, helping the state-owned developer to sell all 1,000 units within half a day last Wednesday. Lucky buyers stand to make an immediate windfall on paper of 5 million yuan for a 100-square-metre unit.

"Everybody is catching a ride on the gravy train," said Li Yujia, senior economist with the Real Estate Assessment and Development Research Centre in Shenzhen.

The buying frenzy underscores how the price ceiling - capped to prevent runaway home prices and maintain the affordability of private housing - is backfiring, as millions of jobseekers flock into Shenzhen in search of employment in the tech hub.

Shenzhen, with a current population of about 20 million residents, was nothing more than a fishing village four decades ago just before China carved out a special economic zone to conduct experiments in market capitalism. Since then, the city's economy has grown bigger than that of Hong Kong, and it is now home to several of China's largest companies.