Hong Kong’s home prices will decline about 20 percent during the next four years as a worsening economy and rising interest rates hit demand, according to analysts at Goldman Sachs Group Inc. 

Residential property values will drop by 5 percent every year from 2022 to 2025, analysts including Gurpreet Singh Sahi said in a March 28 report. The investment bank previously predicted prices would remain flat this year then decline 5 percent in 2023 and 2024 before stabilizing the following year. 

Hong Kong’s battle with a fifth wave of Covid-19 infections is hitting the financial hub and will contribute to a shrinking economy in the first quarter, Goldman economists said. The government has ordered businesses including gyms and cinemas to shut and restricted gatherings in the past couple of months. Some measures are set to loosened in late April if the pandemic situation continues to improve. 

The social distancing rules will combine with rising unemployment and higher borrowing costs to dampen demand, which will be reflected in lower home prices, according to the bank. Goldman expects mortgage rates to more than double and be close to 4 percent in 2024 from about 1.5 percent currently. 

The city’s home prices have been falling steadily in the past few months, according to a local property agency. Prices are down more than 3 percent since the beginning of the year and are at the lowest in 12 months.

(The Standard)

Are Russell Street’s glitziest days over, as Covid-19 mask shops replace Prada and Burberry in Hong Kong’s retail slump?

An expected relaxation of social distancing measures after April 20 and the distribution of consumption vouchers has led many landlords to raise rents and narrow discounts

‘Usually, monthly rents are below HK$200,000 for these mask shops. Any higher and they will not survive’

Russell Street, once the world’s most expensive retail strip and home to brands such as Burberry and Prada has seen its character change dramatically during the coronavirus pandemic.

The street was taken over by mask retailers that paid much lower rents following an exodus by the big names that once made Causeway Bay a shopping mecca for tourists. But this trend may be fading, as Hong Kong rents seem to have bottomed out, a property agency said.

An expected relaxation of the city’s strictest social distancing measures after April 20, and the distribution of consumption vouchers by the government has led many landlords to raise asking rents and narrow discounts, agent said.

“Usually, monthly rents are below HK$200,000 [US$25,551] for these mask shops. Any higher and they will not survive,” the ageny said. “So there will not be so many in the future.”

Mask shops mushroomed in Hong Kong’s four core shopping districts during the coronavirus pandemic. They recorded the largest increase in the short-term tenancies category, which more than tripled from 30 in the third quarter of 2020 to 113 in January this year, according to the agency. Mask shops increased from just one to 50 in this period. In short-term tenancies, however, landlords and owners can usually ask to exit a lease after one or two months.

There are six mask shops in Russell Street alone, according to news portal HK01. They may pay rents that are just 15 to 25 per cent of peak levels seen around 2013, the agency said.

For instance, a 300 sq ft shop was recently leased at HK$80,000 per month, 90 per cent lower than what accessories retailer Folli Follie paid for it in 2013, and 60 per cent below its previous lease, according to the Hong Kong Economic Times. Swarovski and Tag Heuer ended their leases on Russell Street recently, and the shop vacated by Tag Heuer was taken by a mask shop for HK$100,000 a month. This new lease represents a 94 per cent discount from a peak, HK01 said.

The departure of luxury brands that paid high rents has sent the rateable values – or the estimated annual rent value of a property – of shops in the street down by about a third, HK01 said.

The abrupt change in Russell Street’s character also comes as Financial Secretary Paul Chan Mo-po on Sunday forecast that Hong Kong’s unemployment rate for the three months ending in February rose to 4.5 per cent, its highest level in nearly five months.

The agency went to 156 streets in the four core shopping districts of Central, Causeway Bay, Tsim Sha Tsui and Mong Kok to count the number of vacant shops on two occasions in January and March this year. These districts had a total of 7,524 street shops as of this month.

The agency found that 829 shops were vacant in March, an increase of 82 shops from January this year, when the pandemic posed less of a problem. The vacancy rate of street shops rose from 9.9 per cent to 11 per cent in two months, its highest level since the first quarter of 2021.

At least 10 per cent of the shops in these areas have suspended operations because of social distancing measures and the compulsory closures of bars and beauty salons. Central saw the biggest proportion of suspensions at 17.2 per cent. Close to a quarter, or 468, of the food and beverage outlets have suspended operations in these districts.

The agent said that he had heard of landowners cutting rents for sectors that could not open their shops, such as catering and beauty, by 40 to 50 per cent, while others may have seen a 10 to 20 per cent cut.

About 20 to 30 per cent of tenants in some sectors would pay their rents late, possibly two to three months of rent, he added. Those with rents cut were less likely to pay late.

The agency expected that in the next six months, shop vacancy rates in the four core districts would hover at a high of 10.5 to 11.5 per cent on average. If bars, beauty salons and entertainment venues failed to reopen as scheduled, there would be a wave of closures in the next two months, the agent said.

(South China Morning Post)

Property agency said that Hong Kong’s property doldrums will remain through the first half as Covid-19 weighs on buying sentiment for real estate

New property launches shrank 83.3 per cent in the first two months of the year to 457 units, the agency said

Total property transactions shrank to 13,415 deals valued at HK$122.6 billion from January to March 29, 41 per cent lower than the first quarter of 2021

One of the largest local property agency said that Hong Kong’s social distancing policies would weigh on property market sentiment through the first six months, after the city’s sole publicly traded real estate agency posted its third annual profits slump in four years.

Net income fell 24 per cent to HK$100 million (US$12.8 million) last year, without the one-off employment support scheme that had helped it swing to profit in 2020. Revenue, 99 per cent contributed by agency fees, rose 20.5 per cent to HK$6 billion, the company said in a statement to the stock exchange.

Hong Kong is going through the city’s worst Covid-19 outbreak, with 26.6 deaths per million residents as of March 24, placing the city among the world’s highest mortality rate. Social distancing rules to contain the disease had paralysed most business activities, deterring developers from launching their weekend sales campaigns.

“Developers have not been active, postponing the launch of new projects while placing their focus on clearing their inventories,” an agent said in a statement, adding that transactions are likely to stay low in the first quarter. “As for the secondary market, some buyers prefer to stand on the sidelines and many sellers have chosen not to allow property inspections to minimise the risks of [Covid-19] infection.”

New launches shrank 83.3 per cent in the first two months of the year to 457 units, the agency said.

Total property transactions, including homes, shops, industrial units and car parking space, shrank to 13,415 deals valued at HK$122.6 billion from January to March 29, 41 per cent lower than the first quarter of 2021, according to the agency’s data.

Buyers also delayed their purchase decisions in fear of a further fall in home prices amid the city’s worsening Covid-19 situation.

Goldman Sachs said on Monday that Hong Kong homes are likely to fall by a fifth over a four-year period, as borrowing costs increase and rising unemployment weighs on demand.

The bank now expects home prices to decline by 5 per cent every year through 2025, a more pessimistic forecast than its earlier forecast of the market recovering in 2025 after a two-year slump.

Transactions for commercial property also fell, as economic backlash from the pandemic deterred businesses from expanding or upgrading. In February, there were only 50 transactions of commercial properties in Hong Kong, down 24 per cent from January, according to data from another agency.

The agency said that the mainland property market fared even worse.

“As the central government was determined to contain the mounting debt of China’s property developers and limit their gearing, the property market turned sour,” it said.

The transaction volume of the secondary residential market in Shenzhen, being the group’s main operation in mainland, tumbled by about 57.3 per cent in 2021 from a year earlier.

(South China Morning Post)

商廈買賣錄50宗按月跌24%

受第五波疫情打擊，商廈交投備受壓力。據本港一間代理行指出，上月商廈僅錄50宗商廈買賣登記，按月下跌約24%，連跌三個月，並創過去18個月新低。

據該代理行綜合土地註冊處資料顯示，今年2月市場共錄50宗商廈買賣登記 (數字主要反映2至4星期前商廈市場實際市況)，較一月的66宗，按月下跌24%，連跌3個月，兼創近18個月低位。

代理：屬連跌三個月

此外，成交金額亦同步下挫，上月商廈買賣登記金額僅錄11.45億，按月跌約39%，連跌兩月，創過去11個月以來新低，期間較矚目成交為長沙灣荔枝角道888號28樓，成交金額近3.88億，其次為九龍灣億京中心B座32樓連5車位，以約1.47億易手。

創18個月新低

該行代理表示，受疫情及股市急挫影響，導致商廈買賣登記量急下滑，但近期疫情稍回穩，為市場釋出曙光，料本月買賣登記量有力回升約一成。

另一方面，據另一代理行綜合土地註冊處資料顯示，二月商鋪註冊宗數錄85宗 (主要反映1月份市況)，按月急跌39.7%，金額約12.78億，按月下挫約58%。該行指出，市場憧憬防疫措施有機會於下月放寬，加上電子消費券即將派發，故料市況有力逐步回暖。

(星島日報)

更多億京中心寫字樓出售樓盤資訊請參閱：億京中心寫字樓出售

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更多荔枝角道888號寫字樓出售樓盤資訊請參閱：荔枝角道888號寫字樓出售

更多長沙灣區甲級寫字樓出售樓盤資訊請參閱：長沙灣區甲級寫字樓出售

尖沙嘴本木商場2.1億易手 恒基售非核心物業七個月連沽五鋪

受疫情打擊，鋪位市場觀望氣氛籠罩，發展商亦趁勢放售旗下非核心物業。由恒基持有的尖沙嘴本木巨鋪以約2.1億獲本地投資者承接，呎價約2.1萬；恒基於過去七個月連沽五鋪位，合共套現逾十億。

市場消息指出，由恒基持有的尖沙嘴德成街2號本木基座商場，於本月初以約2.1億售出，涉及地鋪及商場一樓，總樓面逾1萬方呎，以易手價計，呎價約2.1萬。據悉，該買家為一名姓嚴的本地投資者，購入作長綫投資用途。

恒基：不作回應

本報昨日就上述消息向恒基作出查詢，惟該集團對上述消息不作回應；據業內人士指出，上址涉及地下及一樓，各佔面積約5000方呎，現時一樓部分由日式咖啡店租用，料買家享租金回報約2.5厘水平。

代理稱，該發展商向來以暗盤形式放售旗下非核心鋪位物業，於市場待價而沽，多以理想價售出，該半新盤位處市區地段，整體消費力不俗，同區亦少有同類放售盤，成交價屬合理水平。

本地投資者承接

該樓盤坐落於尖沙嘴德成街2號，為單幢項目，於去年4月入伙，提供172伙住宅，面積由233方呎至752方呎，戶型包括開放式至三房單位，另設特色戶。

事實上，恒基自去年9月起已頻頻沽售旗下非核心鋪位物業，期間合共沽出5鋪位，套現逾10億，其中，本報於上月獨家披露，由該發展商持有的九龍城曉薈兩地鋪，以4212萬獲本地投資者承接，呎價約2.41萬。

另外，旺角荔枝角道27至35號百匯軒地下3號及4號鋪，附連該項目兩廣告位，於今年一月以1.301億售出，以鋪位建築面積約3589方呎計，呎價約36249元，買家為資深投資者古鳳翔。

至於涉資最大買賣為去年10月，以4億售出堅尼地城爹核士街11號浚峯地下1至8號連1樓，地鋪面積約7543方呎，1樓面積約4071方呎，總樓面約11614方呎，呎價約34441元；另外，鴨脷洲倚南一籃子鋪位物業，則於去年9月以2.25億獲本地投資者承接，以總樓面約5228方呎計，呎價約4.3萬。

(星島日報)

新蒲崗一籃子工廈作價1.82億 外資迷你倉STORHUB承接

工廈物業有價有市，再錄大手成交。新蒲崗百勝工廠大廈一籃子物業以約1.82億易手，買家為迷你倉營運商STORHUB，料購入作自用用途，該外資迷你倉營運商於今年以來連購三項工廈物業，合共涉資逾8.8億。

市場消息指出，外資迷你倉營運商STORHUB再度入市，最新以約1.82億購入新蒲崗百勝工廠大廈一籃子物業，包括該廈3樓及4樓多個單位，及地下兩個車位。

總樓面4.47萬呎

本報昨日就上述消息向STORHUB查詢，截稿前未獲回覆。據代理指出，上址總樓面約44744方呎，以易手價計，平均呎價約4067元，屬市價水平。

連購三工廈涉8.8億

據代理行資料顯示，該工廈近期交投疏落，對上一宗買賣需追溯至2018年9月，該工廈高層C室，成交價為2700萬，以建築面約6000方呎計，呎價約4500元。

據知情人士透露，該外資迷你倉營運商有意大舉進軍本港迷你倉市場，料購入上述物業自用。該品牌近期活躍於工廈買賣，由鄧成波家族持有的紅磡義達工業大廈及長沙灣栢裕工業中心一籃子物業，先後於今年一月及本月以3.5億易手，故該迷你倉營運商於今年以來連購3項工廈物業，合共涉資逾8.8億。

鋪市亦錄大手租務成交，消息指，日本連鎖超市驚安之殿堂承租紅磡黃埔天地時尚坊地下入口及地下一層多個鋪位，總面樓約2.5萬方呎，月租120萬，呎租約48元。

(星島日報)