Hong Kong Wen Wei Po (By Yan Lunle)
There is a new project being approved of pre-sale consent during Hong Kong dull property market, and the pricing will be subjected to severe tests. Sources point out that , LOHAS Park phase 9A in Tseung Kwan O developed by Wheelock and MTR, was approved for pre-sale consent last week, involving 647 units. The MTR Property Director, Tang ChiFai reveals that, MTR will launch three projects in the coming months, involving LOHAS Park Phase 9 (1,653 units), LOHAS Park Phase 8 (1,422 units) and Cullinan West III (1,172 units), a total of more than 4,000 units.
Tang ChiFai expresses, three projects will be launched in the next few months, but there is no timetable for the sale yet, because it depends on the market sentiment and the desire of prospective buyers to enter the market, while the real estate developers and the MTR will not deliberately stockpiling the houses, since developers want to have cash income as soon as possible due to the large project investment cost.
Wong Chuk Hang Station phase 4 is scheduled to be tendered next month.
Tang ChiFai also frankly says, the market sentiment is not stable recently, and the sales of some new projects are not ideal. “The pace of selling will face many troubles if the sale after I uploading the price list is not good or only a small portion is sold.” However, he is not completely pessimistic about the property market, and believes there is a long-term shortage of housing and there is demand in the market. The main sales target of their residential project is the users, so it is hoped there will not be affected too much, but he admits that the pricing must be "reasonable".
In the next six months, MTR plans to launch tenders for LOHAS Park phase 12 and Wong Chuk Hang Station phase 4, involving 2,650 units. Among them, Wong Chuk Hang Station phase 4 is expected to commence tendering process next month, and it has a total floor area of about 500,000-600,000 sq ft, located in the southeast of Wong Chuk Hang Station, providing 800 units. As for the launch of the LOHAS Park phase 12, he points out that it will depend on the tendering response of Wong Chuk Hang Station phase 4, “What to do if it faces the failure of bid?” he says.
Recently, the community is not stable, so will the MTR make adjustments to the tender terms? Tang ChiFai responds, MTR tender terms are "very friendly" to the developers, including dividends and payment of a fee, and they will check according to the market conditions at the time of tendering, also he laughs and says: "We will make our tender terms to be as friendly as possible following the situations.” In addition, the future land premium level of the MTR project is affected by the situation, and he believes it will reflect the market conditions when the Government formulates it.
Tang ChiFai admits the leasing of their shopping malls or stores is affected by the two consecutive months of demonstrations, because the recent consumer sentiment has dropped significantly, making the visitors flow rate in the shopping malls to decrease, but he emphasizes that the MTR shopping malls are diversified with not only high-end shopping malls but also people's livelihood shopping malls or shops, also the MTR shop services are mainly fixed rents, in which the rent linked to sales is only a small part, so it is expected the impact will be slight.
Violent incidents impact their malls.
As to whether the rent reduction will be made depends on the development of the situation, since the data received in June had not seen a significant decline, so we will wait until the July data to make a decision, also we haven't seen a large number of merchants requiring to reduce the rent at this stage. Facing various challenges, he expresses to launch more shopping mall activities and discounts in the future hoping to minimize the impact on merchants.
Recently, social conflicts have also spread to shopping malls. Tang ChiFai points out that MTR will not require the police to enter the shopping arcade under normal circumstances, however, the company regards customer safety as the primary consideration, so they will require police assistance if they consider customers have safety concerns, the flow of people must be controlled order or there's a crime happening. In addition, the company will open three large shopping malls in the future, and LOHAS Park Shopping Mall among which has been already rented 50% will be opened in the second half of next year. Tai Wai Station Shopping Centre and Wong Chuk Hang Station Shopping Centre will be completed in 2023.