Morgan Stanley eyes Macau assets

Morgan Stanley is looking for property opportunities in Macau, including the Venetian Group's Cotai strip development, according to industry sources.

With Macau-related stocks becoming as popular as casino chips in the former Portuguese enclave, the investment bank, a frequent buyer in commercial properties in Hong Kong in past years, is keen to cash in on the booming tourism and property businesses there.

The Venetian Group is developing eight hotels at its Cotai strip project on a stretch of reclaimed land between the islands of Coloane and Taipa. It has been seeking investment partners and hotel-management companies.

"I don't think the Venetian Group will have any trouble in seeking a partner. There're a lot of interested parties asking around, looking to make a fortune in the city," according to one industry source.

"At the moment, Macau is more or less untapped and it's on a first-come-first serve basis."

Emperor (China Concept) Investments is another company looking to cash in after Far East Consortium, Melco International Development and Shun Tak Holdings revealed their investment plans in Macau.

According to a market source, Emperor is tapping into the market for about $ 300 million to finance the purchase of a building in Macau.

The building would be converted into a hotel-casino complex. It is expected to be held in a joint venture with Sociedade de Jogos de Macau, which is controlled by gambling tycoon Stanley Ho Hung-sun and film star Jackie Chan, the source said.

Tai Fook Securities is arranging the fund-raising issue.

Hospitality and property analysts are mainly upbeat about the casino, hotel and property businesses in Macau, expecting the city to become the Las Vegas of Asia.

"The success is not dependent on the population in Macau. We are betting on the number of mainlander visitors and I am quite positive about that picture," said Nigel Summers, director of Horwath Asia Pacific, a hospitality consulting firm.

Casino revenue has risen by 50 per cent to 60 per cent year on year, with mainland visitors up by more than 50 per cent. Hotel rooms and shop spaces are in great demand.

"At the moment, the individual-travel arrangement for Macau is limited to only a few mainland cities. Once it is extended to more cities in China, there will be a lot more tourist arrivals," another industry analyst said.

In addition to mainland tourists, Macau has lured many middle-class mainlanders seeking to live in the city. By law, anyone who invests one million patacas in Macau is allowed to apply for residency there. By comparison, an investment of $ 6 million is required to apply for residency in Hong Kong.

"We see this as a long-term trend, going on for something like 10 years," the industry analyst said.

"Some people don't believe it is happening. They say that many too many casino-hotels are still up in the air and that mainland tourists would prefer to stay in Zhuhai, which offers cheaper accommodation," the analyst said.

"But I don't believe it's an illusion. It is part of the big picture of the continual economic growth of China."

HONG KONG (Dow Jones)--Shun Tak Holdings Ltd. (0242.HK) said Monday it has entered into a memorandum of understanding with an investment holding company controlled by Macau casino tycoon Stanley Ho to buy companies that hold the development rights of a site in Macau for HK$1.5 billion.

Shun Tak is a property-to-shipping company also controlled by Ho.

The site adjoins the Macau Tower in Nam Van, Macau. It has a gross area of about 428,410 square feet and a developable gross floor area of 2.7 million square feet to be used for mixed-use property development.

Of the HK$1.5 billion, HK$750 million will be paid in cash, and the remainder will be satisfied by issuing 148.8 million new shares at HK$5.04 each to Newco, an investment company nominated by the seller, Shun Tak said.

Newco is 47% owned by Stanley Ho, and 53% held by a company jointly owned by Pansy Ho, Daisy Ho and Maisy Ho.

The issue price represents a discount of 16% to the last trading price of Shun Tak's shares of HK$6.00 before they were suspended from trading Thursday. The shares will resume trading Monday.

The acquisition price of HK$1.5 billion represents a 7.4% discount to the site's estimated market valuation of HK$1.62 billion as valued by Chesterton Petty Ltd. on Tuesday.

Danny Chung and Eli Lau

Skynet (International Group) Holdings, a unit of Hong Kong-listed builder Paul Y-ITC Construction, has won a HK$1 billion contract for an entertainment complex being developed in Macau by casino tycoon Stanley Ho, a source close to the deal has confirmed.

The company had outbid other contractors for the design and building contract, the source said.

The contract details of the hotel-casino-retail complex had been settled as early as May this year.

The initial design was for a tower soaring more than 100 storeys, but this was rejected by the Macau aviation authorities.

The current design should have a height less than 100 storeys and was still being revised, the source said.

``The company is now making preparations to carry out the contract and a whole team of people have been sent there,'' he added.

The complex, situated at Baixa da Taipa in Macau, is being jointly developed by Ho's Hong Kong-listed Melco International Development and his gaming conglomerate, Sociedade de Turismo e Diversoes de Macau (STDM). Melco would be co-ordinator of the complex while the Hyatt Hotels Group would manage the six-star hotel facilities.

The casino would be run by STDM's unit, Sociedade de Jogos de Macau (SJM), and the electronic gaming lounge by Melco's unit, Mocha Slot Group.

The joint venture would receive rental income from Mocha and SJM.

The entertainment complex would be ready for operation by 2006.

Skynet is 94 per cent-owned by Paul Y-ITC, Hong Kong's largest listed builder.

Earlier this year, Paul Y-ITC injected the construction unit and shareholder loans of a subsidiary into Skynet.

Last month Melco announced the placing of 75.9 million new shares at HK$5.2 per share to raise HK$395 million.

Of the HK$377 million in net proceeds, 55 per cent, or HK$94 million, would be used for development of the entertainment complex, 25 per cent for expansion of the company's Mocha slot machine operations and the rest reserved as working capital.

eSun Holdings, a media unit of Lai Sun Group, will join forces with the group's mainland property arm, Lai Fung Holdings, to develop 30 detached houses in Macau, the two companies said.

The 215,200 square foot site for the development, valued at about HK$115 million, is located in the reclamation area between Taipa and Coloane.


eSun will own 60 per cent of the project, and Lai Fung will pay HK$46 million for a 40 per cent stake. The development land is part of a 1.52 million sq ft site intended to eventually house a hotel and TV studios as well. In 2001, eSun acquired the development rights to the land for 25 years, with an option to extend the term to 2049.

eSun said having a partner in the residential project would minimise its financial and business risks while allowing it to retain a 60 per cent interest in the project's upside.

Chief executive Mark Lee said last month the hotel and residential portion would require an investment of more than HK$500 million. At the time, he also suggested the floor area of the residential project might be increased.

Thursday's statement made no mention of that possibility but, if it does occur, land premium negotiations with the Macau government will be necessary.

Lai Fung said last week it had bought two pieces of land with a combined area of 875,000 sq ft in Zhongshan city, Guangdong.

The company posted a nearly 40-fold jump in net profit to HK$173 million for the year ended July 31.

eSun shares rose 14.3 per cent to close at HK$0.52 on Thursday as the market continues to gobble up Macau concept stocks, while Lai Fung shares gained 3.4 per cent to HK$0.246.

HONG KONG, Dec 30 (Reuters) - Property concern Lai Sun Development Co. Ltd.'s 42.5 percent owned media unit eSun Holdings Ltd. said it may build hotels on a site in Macau at a cost of HK$2 billion (US$256 million).

"eSun would like to emphasise that the proposals are currently at a preliminary stage and may or may not proceed," eSun said in a joint statement on Thursday.

eSun said earlier this month it planned to develop a 141,000 square metres site in Macau, which would include residential buildings, two hotels and a TV studio or city.

Sister company Lai Fung Holdings Ltd. also said this month it might join eSun in the Macau development.

Shares of eSun, which have surged 428 percent in the past three months, jumped 22 percent to HK$1.90 in early Thursday morning trade.

(US$1=HK$7.8)

Macao's urban poor turn to public housing

MACAO, March 24 (Xinhuanet) -- Macao's public housing is in hot demand as thousands of urban poor are in danger of being driven out of home because of soaring property price.

The Macao Housing Institute has handed out more than 4,400 application forms to potential buyers of the government subsidized housing in a recent round of bidding for public housing. However, official sources disclosed that there are only some 100 of such houses in vacancy, which would fall far short of the demand.

With property rate still climbing, the city's low-income families become increasingly worried. Many people find commercial housing increasingly out of reach.

The average housing price per square meter is estimated at 8,016 patacas (1002 US dollars) by the second half of 2004, up 27 percent from the same period of the previous year, and it keeps onrising since the beginning of this year.

The British Savills, a property service provider setting foot on Macao earlier this week, forecast that the real estate price inMacao would double in the coming two years, citing the case of theLas Vegas Sands' latest casino investment project on the Taipa Island of Macao, which would lift the real estate price from the current 8,000 patacas (about 1,000 US dollars) per square meter to20,000 patacas (2,500 US dollars) in two years.

In addition to the price rise of commercial housing, landlords are raising flat rents steeply, forcing lots of people to seek other shelters.

Some local economists said that Macao's new round of economic boom bolstered by the gaming industry has not yet benefited the grass-root class, while the soaring real estate price has become amajor indicator of the economy. They advised the government to build more subsidized flats or locally-called "social housing" to help urban poor to survive.

The gaming industry earned 36.8 billion patacas (4.6 billion USdollars) in gross revenue last year, contributing 14.7 billion patacas (1.8 billion US dollars) to the government's tax coffer, which made up of 70 percent of the government's tax income.

The Housing Institute said that by the end of May last year, 4,653 families had bought "social housing." Up to now, another 106 families could be hopefully settled soon, but there are over 4,400more waiting in a long queue.

All people holding valid ID documents in Macao for more than five years and above the age of 18 are eligible to apply for public housing. The government has not offered the subsidized flats for low-income families since November last year.

Macao has a population of some 460,000, and the city is witnessing a sharp increase in the number of imported workers as all sectors are in urgent need of new recruitment. They have also boosted the need for housing.

Macao's real estate market has been burgeoning upon the Macao Special Administrative Region (SAR) government's open-up of the gaming market by issuing casino operation concessions in 2002. Thesector well known for its lingering bubbles in 1990s is on the threshold of a new upturn period after having experienced over a decade long doldrums. Soon after the first American casino, the Sands Macao was opened in May last year, there followed the opening of several new casinos offering thousands of job opportunities.

The Housing Institute has promised to make a thorough investigation on the public demand for the "social housing."

Kathryn O’Meara
March 30, 2005

In view of the resurgent Macao economy, Savills has opened an office in Macao.

According to Savills, there has been growing demand for professional property service providers with an international profile and experience of the Asia Pacific real estate markets.

Savills Macao managing director Raymond Lee said Asia’s buoyant real estate economy is attracting international funds in increasing numbers and Macao currently offers competitive entry into a rapidly reforming economy which is set to benefit from both its popularity among Mainlanders as well as its growing international reputation.

“It is essential that we are able to meet the needs of our clients in Asia’s fastest growing real estate markets,” Lee said.

Most recently the focus of international investors has been on land development, Lee added.

“Savills worldwide network of offices has allowed the company to advise overseas funds on entry into the Macao market. These are funds with companies we already have longstanding relationships.”

The main services offered are:
• Investment agency
• Property & facilities management
• Property valuation & consultancy
• Development appraisal and due diligence services on land matters

The establishment of Savills Macao office is a further step towards completing the company’s Asia footprint which currently extends to Beijing, Shanghai, Shenzhen and Guangzhou on the Mainland as well as Hong Kong, Japan and Singapore.

“In particular, we believe that Macao offers enormous business potential for both property professionals and investors,” Lee concluded.

Serviced flats group sets sights on Macau
Foster Wong
4 May 2005
South China Morning Post

Shama Group, a relatively new boutique serviced apartment operator in Hong Kong, plans to invest up to $200 million to expand into Macau.

The private company, seeing boom times ahead for the neighbouring SAR, is in talks to build a block of 100 serviced apartments by 2007 and expects to seal the deal this year.

"We see Macau as a very natural step for Shama. It's a market that we have a good understanding of the needs and most crucially, the timing," said Shama Group chief executive and co-founder Elaine Young.

Shama, which started business in Hong Kong a decade ago, now operates about 200 serviced apartments in four locations. It will open another project in Mid-Levels, offering 48 units, next month.

The group also plans to open a serviced apartment project in the southern mainland city of Zuhai - its first move into China.

"Occupancy at Shama hasn't dropped below 96 per cent in the past 18 months, even with price increases, so we have not reached the ceiling regarding demand or pricing," Ms Young said.

Shama now charges tenants about $45 per sqft, or $18,000 to $65,000 per month depending on unit size. The price includes complimentary membership to California Fitness and Kee Club.

Corporate clients account for 80 per cent of leases. Tenants are executives in the financial and legal sectors aged between 25 and 45 with high disposable incomes.

"Our tenants are high achievers earning good money so understandably they want to live in a quality apartment," she said.

　　今年以來，新娛樂場陸續投入運作，整體失業率下調，旅遊人士與日俱增，帶動零售消費信心，在經濟形勢一片大好情況下，本澳樓市暢旺，交投活躍，樓價繼續攀升。

澳門半島
　　南灣湖豪宅湖景豪庭平均呎價約1450元，單位面積由1800~5200平方呎不等，目前仍有單位在售；新口岸同區怡寶閣、怡濤閣放盤，出售均呎價870餘元，據悉二手承接亦佳，餘下貨尾很少；荷蘭園區新禧閣推出貨尾均呎價為790餘元；筷子基嘉應花園則仍繼續發售貨尾單位，據悉去貨情況不錯；而青洲泉喜花園月初推少量貨尾，呎價仍為300餘元起，火速售罄。

氹仔區
　　氹仔鴻發花園月尾公開發售，但據聞內部發售時，單位已全部由投資者承接，現在三幢住宅對外公開發售均呎價約890~980餘元；新入伙之友利花園出售均呎價約860餘元，售況平穩；另創福豪庭上月新一批單位均呎價約750餘元，目前已售罄；樂駿盈軒則仍繼續發售貨尾單位。

路環區
　　路環竹灣豪園別墅屋宇建築面積3,905~5,226平方呎，另綠化面積678~2,400平方呎，目前有散盤叫售600多萬。

近期率先把業務拓展至澳門市場的香港地產代理公司，曾經調查港人喜歡在珠江三角洲內哪個城市投資物業。結果顯示，選擇澳門及深圳作為投資物業地點的，各佔32.1%。港澳兩地居民無語言隔膜，是澳門的優勢之一。其次，在港人眼中，澳門法制及治安均較深圳勝一籌，亦是港人喜歡在澳購置物業的原因。而生活水平較香港低、往來港澳僅一小時船程的便捷、飲食文化豐富多樣等，均促使港人對澳門投下信心的一票。不少港人都因為看準澳門博彩業開放呈現朝氣，在手頭有餘錢的情況下來澳置業，視澳門物業為投資工具。

賭權開放效應令新口岸，尤其是皇朝廣場一帶的商舖和住宅價格飛升，且升勢至今並沒有放慢跡象。自美國博彩營運商美高梅金殿(MGM)落實與澳博發展計劃後，不單該帶商舖被封盤數目增加，商舖的每呎售價更進一步上揚。商舖封盤趨升現象最近亦蔓延至有計劃發展成步行街的荷蘭園，尤其是貼近塔石球場一帶的商舖。一年內，該帶商舖售價和租金已增升近八成和六成，個別商舖每呎售價更貼近新口岸，有個別商舖售價更叫價四千元至四千五百元一呎，且達成交易。由於陸續有外來投資者將目光轉移到荷蘭園商舖，有地產業者預期，該區的商舖售價和舖租在未來有較大上升空間，商舖封盤的情況料增。

The value of Macao's property sales and purchase contracts signed in the first quarter rose 80.6 percent over the same period of last year, according to official statistics published here Thursday.

The figures from the Statistics and Census Service indicated that a total of 5,412 real-estate sales and purchase contracts were inked, involving the transaction of 6,981 flats with an officially registered value of 4.58 billion patacas (558 million US dollars).

The total registered value of mortgage credit granted in the first quarter reached 4.03 billion patacas (491 million US dollars)and 44.5 percent of the amount was concerned real-estate purchases,according to the figures.

Macao's real-estate market has seen a boom since Macao returnedto the motherland in 1999.

Websites about Macau Real Estate companies, apartments, hotels and office buildings

APARTMENTS : Macau Island Park
http://www.macau-islandpark.com/c/saleinfo.html

http://www.macau-islandpark.com/images/leftnav/left_bar.gifhttp://www.macau-islandpark.com/images/intro/intro_1_c.gif

Developer: Veng Ngai Realty Co.
http://www.vengngai.com/

http://www.vengngai.com/logo2000.gif

List of buildings pics
www.hangtai.com/job.html

A model of the 'City of Dreams' by Melco International Development, a hotel and casino project that will feature the world's first underwater casino in Macau, is displayed during a news conference in Hong Kong May 17, 2005. REUTERS/Bobby Yip
http://today.reuters.co.uk/genImage.aspx?uri=2005-06-24T105401Z_01_NOA438969_RTRUKOP_2_PICTURE0.jpg&resize=full

By Dominic Whiting, Asia property correspondent

MACAU (Reuters) - The way Macau property prices are soaring while rows of new apartment blocks stand nearly empty, investors could be forgiven for thinking that the mushrooming casino business is providing the gas for a property bubble.

The former Portuguese enclave on China's southern tip has drawn speculative flows from Shanghai, which is being officially cooled after an explosion of real estate investment, and Hong Kong, where rising interest rates are starting to bite.

Macau developers can still sell sparkling high-rise blocks in just a couple of weeks, but buyers are taking a big risk. There is hardly any rental market -- only around a tenth of new apartments are lived in.

"There's a tremendous feeling of a gold rush town," said Elaine Young, chief executive of Hong Kong serviced apartment firm Shama, which is looking to expand into Macau.

"The property market has risen outrageously."

Apartment prices rose 50 percent last year. Property agents predict the same in 2005, and analysts at investment bank Merrill Lynch expect the cost of an apartment to double in three years.

But the rampant speculation, mostly by people from Hong Kong and the rest of China, is based on economic fundamentals.

Gross domestic product grew 28 percent last year thanks to a 40 percent jump in tourists visiting the only place in China where casinos are legal. Per capita GDP for Macau's 465,000 residents has risen to the level of New Zealand's from that of Slovenia in just one year.

Officials predict 20 million visitors will pour in this year, a fifth more than in 2004.

ROOM TO BOOM

Investors are betting there will be a bigger boom in 2007, with the opening of the first phase of the Cotai Strip of opulent casinos, plush hotels and shopping malls, being built on about 5 sq km of land reclaimed from the silt-clogged Pearl River delta.

The 60,000-room seven-casino three-phase project was dreamed up by Las Vegas gaming tycoon Sheldon Adelson. Hoteliers involved include Hilton Group, Marriott International and Four Seasons Hotels.

"I don't see a bubble," said Gregory Ku, head of property consultants Jones Lang LaSalle in Macau, who has privately invested in two Macau apartments.

"A bubble means there are no good things to support the market. But Macau has many."

China could clamp down on loan sharks that fund gambling trips, and some analysts say competition from Singapore's planned casinos could stack the odds against another Macau boom.

But the demands of the industry itself, regardless of its success, are having an impact.

"Until the casinos raised their glamorous heads, there was no need for serviced apartments," said Young. "Now there will be human resources people, entertainers, people to run the hotels and convention business, designers, architects, civil engineers."

BOOM ROOTS

The excitement began in 2002 when Macau ended a gaming monopoly held by shipping and gambling tycoon Stanley Ho, who boasts of having once fought off a pirate attack.

China then eased travel restrictions in 2003, prompting a flood of Chinese tourists.

The number of mainland Chinese approved for residency in Macau nearly trebled last year to 6,885 -- each bringing mandatory property investment of $128,000 (70,000 pounds).

A typical 2,000 sq ft, three-bedroom luxury apartment costs $900,000, but that is still only a tenth of some projects in Hong Kong, an hour away by ferry or 10 minutes by helicopter.

Authorities are considering market-cooling measures, such as a cut in bank loans to 70 percent of a property's value, from 90 percent, but Merrill Lynch analyst Hillman Wong points out that similar moves in Hong Kong did little to quell speculation there in the 1980s and 90s.

He expects Macau home buyers to pay up to 188 months' salary for a flat, against 118 months' worth now. At the height of the bubble in Hong Kong in 1997, home buyers paid 440 months' salary.

"People in Macau are getting wealthy and there's big demand for upgrading accommodation," Wong said.

"Construction workers got 40 to 60 percent pay rises last year. Junior casino dealers will get 13,000 (Hong Kong) dollars a month," compared with Macau's average of HK$5,500 per month now.

The narrow streets of peninsular Macau are crammed with greying concrete apartment blocks with a smattering of mustard and pink colonial buildings, their arches and shuttered windows remnants of four centuries of Portuguese rule that ended in 1999.

Most of the new construction is on nearby Taipa island, which is fused by the Cotai Strip to Coloane island, and via a causeway linking it directly to mainland China.

Only a handful of outside developers, mostly from Hong Kong, have chiselled a foothold in the tight-knit market, including Hopewell Holdings, Shun Tak, Kowloon Development and Far East Consortium.

A joint venture between Morgan Stanley, Hong Kong-listed Pioneer Global and Wachovia Corp managed to buy a 22-storey office tower.

"Even if a deal is on the table, people pull it because they are petrified of selling too cheaply," Young said.

MACAU – As reported by Reuters: "The way Macau property prices are soaring while rows of new apartment blocks stand nearly empty, investors could be forgiven for thinking that the mushrooming casino business is providing the gas for a property bubble.

"The former Portuguese enclave on China's southern tip has drawn speculative flows from Shanghai, which is being officially cooled after an explosion of real estate investment, and Hong Kong, where rising interest rates are starting to bite.

"Macau developers can still sell sparkling high-rise blocks in just a couple of weeks, but buyers are taking a big risk. There is hardly any rental market -- only around a tenth of new apartments are lived in.

"…But the rampant speculation, mostly by people from Hong Kong and the rest of China, is based on economic fundamentals.

"…Investors are betting there will be a bigger boom in 2007, with the opening of the first phase of the Cotai Strip of opulent casinos, plush hotels and shopping malls, being built on about 5 sq km of land reclaimed from the silt-clogged Pearl River delta.

"The 60,000-room seven-casino three-phase project was dreamed up by Las Vegas gaming tycoon Sheldon Adelson. Hoteliers involved include Hilton Group, Marriott International and Four Seasons Hotels Inc…"

Polar International Real Estate and the Chio Group will each invest $10 million in a joint venture, which will make real estate investments in Macau.

Far East Consortium International may sell one of its four hotels and some of its serviced apartments in Macau next year, says deputy chairman David Chiu Tat-cheong.

With more than 21,000 rooms in Macau either planned or already under construction, analysts expect competition in the hospitality industry to become more intense over the next three years than had generally been forecast.

"Some Taiwanese funds have expressed an interest in acquiring one of our hotels in Cotai," said Mr Chiu.

Far East is developing 3,190 rooms in four hotels in Macau, as well as a casino and a commercial and serviced apartment complex, as part of Macau's Cotai Strip development. The whole development is due to be completed in 2007 -08.

Since the project will only get off the ground within the next two months, Mr Chiu said any sales would not take place in the near future.

"It probably will be next year if we proceed with the sale," he said.

The US$ 3.5 billion Cotai Strip development comprises more than 10,000 rooms, and will be built by Las Vegas Sands, Far East Consortium, Regal Hotels International, Four Seasons and other hotel chains, with the first phase to be opened in 2007.

Far East's project comes at a cost of $ 2.8 billion, of which $ 2 billion will be financed by bank borrowings and the remainder by internal resources, Mr Chiu said.

Benjamin Cheng, an analyst at Goldbond Securities, said in a report that Far East would recoup $ 1 billion from the partial disposal of one hotel and the serviced apartments.

At the same time, market sources said the 380-room Hotel Royal, about five minutes drive from Hotel Lisboa, is being offered for sale through tender for about $ 760 million.

Mr Cheng said in the report that two-thirds of the 21,000 rooms would be ready in 2008 and 2009, compared with the existing inventory of 9,200 rooms.

"In order to achieve a reasonable occupancy rate of 65 per cent, hoteliers in Macau have to sell 13,000 additional room nights every day in 2010. Pressure on room rates should not be underestimated," he said.

Currently, nearly 90 per cent of Macau's visitors are from the mainland and Hong Kong, who on average stay 1.2 nights per trip, against 3.8 days in Las Vegas.

Far East Consortium International will add a fifth hotel to the casino resort complex it is building on the Cotai Strip.

Chief financial officer Bill Mok said the first phase of the project will now encompass four hotels with about 2,400 rooms, some 400 more than previously stated. The casino and showroom area to be leased to US operator Las Vegas Sands will expand by 25,000 square feet to 165,000 sqft.

Two of the hotels, a 600-room Holiday Inn and a 417-room InterContinental, are to be managed by InterContinental Hotels Group. The other two hotels, an 800-room Dorsett and a 606-room Cosmopolitan, would be managed by Far East itself.

The first phase is to open in two years. It will be followed months later by a second phase including a hotel with about 1,000 rooms which Far East may hire Marriott International to manage.

Dorsett is a three-star brand Far East has developed and utilized in Hong Kong and other countries.

Cosmopolitan is the Hong Kong-listed company's new four-star brand, introduced with the opening of the Cosmopolitan Hotel Hong Kong in Wan Chai in February. About 10 percent of its 454 rooms are ``family rooms'' which include a small living room area with a sofa bed or room for cots.

Far East officials say the family rooms have been well-received, so the Cosmopolitan Macau will be entirely made up of such mini-suites. ``What we see is that by 2007, there should be more family travelers going to Macau,'' Mok said.

The additional rooms will add about HK$100 million to the HK$2.8 billion cost of the project, which is also sketched to include Macau's largest shopping mall and cinema complex as well as apartments.

Raymond Ngai, a property analyst with JPMorgan, forecast in a recent report that Far East will earn HK$900 million from selling the apartments. He said Far East may also sell the two InterContinental-managed hotels for HK$2 billion-HK$2.4 billion.

Ngai expects Far East to be able to charge HK$15 per square foot for rent in its mall and HK$20 psf to Las Vegas Sands. Given that Far East could recoup the cost of the project by selling just the apartments and two hotels, Ngai said the company could cruise ahead with HK$600 million-HK$700 million in annual income from the mall, Las Vegas Sands and the other three hotels.

Macau's property boom is seemingly persisting, as the real estate prices saw a year-on-year rise of 31 percent in the second quarter.
The latest figures released by the government-run Statistics and Census Service showed that the average transaction price of residential units per square-meter stood at 10,072 patacas (US$1,259) in the quarter.
The boom is rooted from 2002 when Macau ended the gaming monopoly held for decades by the shipping and gambling tycoon Stanley Ho.
International gambling sharks have since been flocking into the 26-square-km region on a gold rush.
There are currently 17 casinos under operation, two of which being funded by foreign investors. International companies including MGM Mirage, however, are pouring over US$12 billion to build new casinos in Macau.
The special administrative region (SAR), predicted by many analysts, may overtake Las Vegas in 2005 as the world's biggest gambling center by revenue.
Officials foresee that some 20 million visitors will pour in this year, most of which being assumedly gamblers.
Demand for housing among the visitors, those from the Chinese mainland in particular, is likely to keep lifting luxury residential property in the years to come, local real estate agents said.
New casinos in Macau may also draw around 30,000 foreign employees in the next few years, local observers predicted.
Macau has about 10,000 luxury apartments, according to official statistics, and may add 5,000 in the next two years for the flow of gaming industry professionals, they said.
This will surely add up to the confidence of property investors.
The booming property prices are also partly due to the rising number of the mainland Chinese approved for residence in Macau.
The number of legal immigrants from the mainland stood at 6,885 in 2004, being trebled over the previous year.
Many mainlanders have been and are buying Macau property to get the right of residence.
The SAR grants residency to those who invest in at least one million patacas (US$124,876) and the simplest way surely will be the property purchasing.
The way Macau property prices are soaring, however, triggered speculations among economists that the mushrooming casino business has been producing a property bubble.
Developers, in their eyes, can still sell price-rocketing blocks, but buyers are taking a big risk.
There is hardly any rental market in the region with a population of merely 470,000, and only around a tenth of new apartments are lived in, according to official statistics.
Macau home buyers are currently to pay up to 118 months of salary for a flat. At the height of the Hong Kong's property bubble in 1997, home buyers paid 440 months of salary.
Is that the distance between a boom and a bubble?

Did Polar announce to build 250 apartments in Macau? Where?

they announed it before but i cannot find any information about it

Information from the Statistics and Census Service indicated that in 2006, 13,593 real estate sale and purchase contracts were made, with a total value of MOP11.62 billion, down 32.1% and 27.4% respectively over 2005. In the fourth quarter of 2006, 3,701 real estate sale and purchase contracts were made, involving the transaction of 4,541 real estate units, a year-on-year increase of 8.0%. The corresponding total value of contracts in the fourth quarter went up 36.1% to MOP3.1 billion. In comparison with the third quarter of 2006, the number of contracts and their value decreased 0.2% and 15.8% respectively.

In 2006, the total value of mortgage credits expanded to MOP65.03 billion, up 2.8 times year-on-year. In the fourth quarter of 2006, the total value of mortgage credits was MOP4.43 billion, of which mortgage credits not involving actual property transactions reached MOP3.31 billion, whereas those related to purchases of real estate was MOP1.12 billion, equivalent to 25.3% of the total. The total value of mortgage credits was down 11.6% over the fourth quarter of 2005, and those involving actual property transactions registered an increase of 36.7%. Compared with the third quarter of 2006, the above indicators were down 74.9% and 4.7% respectively.

According to the data provided by the Finance Services Bureau, a total of 26,400 units were transacted in the real estate market in 2006, amounting to MOP25.1 billion in value. In the fourth quarter of 2006, the number of units transacted was 9,979 with a total value of MOP11.78 billion. The majority was residential units (64.5% of the total or 6,439 units), accounting for MOP10.34 billion in value. Among all the units transacted, 5,140 units were exempted from property tax (i.e. they were new buildings) and their value amounted to MOP8.78 billion.

The average transaction price of residential units per square meter of usable area in 2006 was MOP10,578, up 5.5% over 2005. In the fourth quarter of 2006, the average transaction price of residential units was MOP10,967, up 8.0% over the fourth quarter of 2005 and down 3.1% over the third quarter of 2006. Meanwhile, the average transaction prices of residential units in the Macao Peninsula and Taipa were MOP9,630 and MOP14,544 per square meter respectively, surpassing the average prices in the fourth quarter of 2005 but remained lower than the records in the third quarter of 2006. Moreover, the average transaction price of residential units in Coloane was MOP15,735 per square meter, down 1.0% year-on-year and up 5.6% over the third quarter of 2006.

The average transaction price of industrial units per square meter of usable area was MOP4,435, up 26.8% over the fourth quarter of 2005 and down slightly by 0.3% over the third quarter of 2006.

In addition, the average transaction price of office units per square meter of usable area was MOP20,819, up 48.7% and 6.3% over the fourth quarter of 2005 and third quarter of 2006 respectively. Among the office units, the area of Praia Grande and Penha recorded the highest average, at MOP25,120 per square meter, whereas the area of Baixa de Macau had the lowest average, at MOP14,595.
( MOP8 = US$1)

Information from the Statistics and Census Service showed that in the fourth quarter of 2006, construction of 25 buildings was started, with 2,923 units and 464,752 m^(2) in gross floor area, up 15.4% and down 20.9% respectively over the fourth quarter of 2005, and up 8.5 times and 1.6 times respectively in comparison with the third quarter of 2006. A sum of 2,299 parking spaces for cars and 416 parking spaces for motorcycles were provided. In 2006, the newly started buildings provided 4,756 units and 1,054,289 m^(2) in gross floor area, down 3.9% and 50.6% year-on-year respectively.

In the fourth quarter of 2006, a total of 26 buildings were completed and extended, involving 122 units and 213,363 m^(2) in gross floor area, down 67.6% and up slightly by 1.0% respectively over the fourth quarter of 2005, and down 94.0% and 60.2% respectively in comparison with the third quarter of 2006. A sum of 487 parking spaces for cars and 107 parking spaces for motorcycles were provided. In 2006, the completed and extended buildings provided 3,026 units and 1,276,321 m^(2) in gross floor area, up 1.4 times and 2.3 times year-on-year respectively.

In addition, the number of residential buildings completed and extended was 14, supplying 102 building units, which went down 68.8% and 94.6% over the fourth quarter of 2005 and the third quarter of 2006 respectively. The housing units were mainly T3 (84 units), accounting for 82.4% of the total, followed by T4 and over (11 units). The number of housing units completed in 2006 totalled 2,783, showing a year-on-year increase of 1.5 times.

source (http://macaudailyblog.com/property/macau-housing-numbers-in-2006-up-by-154/)

Yeah these numbers are all confusing as it is not all clearly defined. :ohno:

That's why we don't work for the Statistics and Census Service. Those are not layman's figures.

List of known funds investing in Macau Properties. I'm sure there are more. If you hear some, please add some details !!

Speymill Macau Properties Co PLC (MCAU).

9 May 2007: Raised further USD70m in a share placement. Presuming 70% financing, the company has used USD43.6m out of USD170m raised so far.
16 March 2007: Second Investment: 24 residential units plus 10 car parks in a recently completed one tower development on Nam Van Peninsula for HKD225m (USD28.8m) or HKD9.375m each. Valued 23 April 2007 at HKD267m (18.7% increase).
29 November 2006: Purchased 243 residential units, with 404,889 sqft (g) and 243 car parks in three towers (mainly tower 3) of a six tower luxury waterfront developed by Golden Cove Property Development Co Ltd/San You Development for HKD906.5m (HKD2239psf). The project with a 47k sf club house may be launched in fall 2007. Valued 23 April 2007 at 34.4% higher at HKD1.2175bn (HKD3007psf).
Development is in Lot U in NE Macau near the proposed bridge with HK.
17 November 2006: Listed London's AIM market raising USD80m. Chairman is Larry Kearns, Chairman of Anglo Irish Bank. Also Peter Churchhouse (ex-Morgan Stanley) is a director.Sjóvá-Almennar tryggingar hf (subsidiary)
1 November 2006: Buyer is a wholly owned subsidary of the largest insurance provider in Iceland. Company bought 68 units of Tower Four of One Central Residences for HKD762m (HKD4,400 psf). In addition, purchaser will fully fit out the interior of the property and some of the common areas (unlike public sales, with standard fittings included).

Macau Property Opportunities Fund (MPO.L)
Listed on London's AIM stock market. Has purchase 3 properties all targetted for completion end-2009. Valuations should be end-2006.
Presuming 30% downpayment, fund has spent around USD60m out of the USD200+m raised.

17 October 2006: Property 1: Early planning stages for middle-class development costing USD8.6m, valued at USD13.21m (+53.6%). Located in south west Macau Peninsula with 13k sqft site. Total commitment USD15.7m
13 Nov 2006: Property 2: One Central Tower 6 with 59 units costing USD86.58m for 148k sq ft (HKD4550psf), valued at USD101.28m (+17%)
13 Nov 2006: Property 3: Affordable high-rise residential development near mainland border on peninsula, in planning stage costing USD20.57m, valued at USD25.64m (+25%). Total commitment USD46m.
5 Jun 2006: Raised GBP105m via listing on London's AIM market.Oaktree Capital Management LLC
Company is Los Angeles-based with USD40bn in assets, partnering Tenacity in developing Nam Van Lake C5-C6 project. Oaktree also holds stake in Macau Studio City

Citigroup Property Investors
Partnered Macauland in the development of the 175-unit The Manhattan.

Quandrangle Propeties (subsidiry of Formosa Group)
Has various properties in Kingsville, The Manhattan, Vista Magnifica, La Oceania and Royal Ascot. Formosa Group and Global Property Partners originally bought 27 apartments in Kingsville in 2004 from San You Development.

Belgravia Chinese Property/Belgravia IFN China Real Estate Fund
According to a fund investor, apparently has ditched its China properties to buy in Macau.
However, according to March 2007 report, Belgravia IFN CRE Fund has 2 retail properties in Mainland China in the pipeline.

Feb 2007: Launched with USD100m
Feb 2007: Property 1: Bought Zhu Kuon Building in Macau, an office building.RREEF/Deutsche Bank property investment arm
European head said to be buying in Macau and the PRD

LaSalle Investment Management (Jones Lang LaSalle investment fund)
Developing four towers 50 storey luxury storey project in Nam Van Lake called Bel-Lago. Project due in 2010 with 500 apartments. Project construction cost expected to be HKD2.5k psf.

Taubman Asia
Part of Taubman Centers, a NY listed REIT which has focused on shopping centeres in the US for more than 50 years. According to its' president, the funds primary focus was on China. But it is now shifting focus to other markets like Korea and Macau. They had viewed more than 200 shopping centers on the mainland and found that none were suitable. Taubman Asia's first investment was in Korea, followed by a 22% stake in Macau Studio City.

So many........
i heard some of these before.....

I was also surprised about the number of funds since Macau is so small !!
This also doesn't include investments made by HK & China property companies (Chinese Estates, Shun Tak, eSun, Hopewell, New World etc.)
I'm not sure even if HK has as many funds buying !

I think it's intresting that Speymill has asked for more money recently. They must have more investments to come !

There maybe many, many, other funds, but Speymill & MPO are listed, so they have to disclose their deals on the stock market. Private funds don't have to say anything !

These purchases by funds have been made to references that LV Sands will sell their Cotai serviced apartments at over HK6.4k psf, and the Four Seasons branded vacation suites at over HK$10k psf.

I have heard a number of these before as well, these funds just pour all their money here in macau now and wish to makes a huge profit from it, even though I agree there are demands for investing these luxury apartments, but it will increase the overall property price in macau in all segments, as a result of this the poor one and the people in their early 20's who want to live alone or with their partner or those who dont want to live with their parent anymore will not be able to afford an apartment later on (even now) or it will takes them a really long time to save up money just to buy an apartment, and this will force to live in a public apartments instead, i guess this is not very good in a way.

Just thought of sharing this report : the analyst from Citigroup on Polytec is bearish on Macau properties and quoted as follow on its Sept 13th report:

Almost one in every three new residential
transactions in Macau was confirmor transaction for the first seven months in
2007. In contrast, only 1.2% of total new residential transactions in Hong Kong
were confirmor transactions in 7M07.

The average local Macanese family
simply cannot afford to spend 61 cents on a dollar of income to buy a new highend
apartment in Macau. Our affordability analysis also shows that even renting
a unit at Villa de Mer, Polytec’s development in Macau, could be difficult.

We believe that, given this high level of speculation, the bullish Macau property
market is not going to sustain. Unless the Macau SAR government introduces
more serious speculation-containing measures (on top of the suspension of the
property investment residency policy), the speculation level would remain high
in the Macau property market.

The pre-sale of One Grantai, a luxury residential project at Taipa developed by a
local developer, was recently launched and confirmor transactions at a price
above HK$5,000 psf were achieved. The affordability index is going one
direction only, in our view, suggesting that residential properties in Macau are
becoming less and less affordable to local Macanese people. We maintain our
view that the high property prices in Macau are not sustainable in the long run
unless end users earn higher employment income.

In my personal opinion, the analyst was wrong for following reasons:

1. he did not address the demand and affordability level from the new expatriates who are pouring to Macau to support the new businesses,
2. he only looks at the sole income of local Macau family to support his affordability index model but did not address dual income families.


Even though I disagreed with him, I just thought it is good to show the other side as most in this forumn are rather bullish like me.

Even though I disagreed with him, I just thought it is good to show the other side as most in this forumn are rather bullish like me.

I think there hasn't been much negative reports as this is the first report on the bearish one I've seen !!!
So far, all the reports I've seen have been positive (tho.. some property agents did mention supply).
Whether you like it or not, you cannot use affordability argument - these luxury developments are obviously not really targeted at (local) customers, but at expats and foreign investors.

The same situation applies to Singapore and London, which have much higher property prices. Most SG private housing (esp luxury) is aimed at the to 10% of the market - with most these these expats. The SG govt has been boasting at its high job creation rate (actually, there's ONLY something like 1 local job created for every 1 expat arrival), but this has succeeded in reducing unemployment to practically zero.
Likewise, it cost HKD75m for a 2 bed apartment in Kensington/Chelsea - most of these are foreigners (esp mid-East, Russia etc). This is obviously not affordable for the UK average person.

Macau luxury prices are still cheaper than Shanghai, Shenzhen, Beijing, let alone HK (3-4x more expensive), Singapore, Las Vegas (where apparently it is still rising) etc.

Macau's local population is not growing much - the growth is more from expats/other workers. Admittedly, not all of these can live in these luxury markets. But land in Macau is scarce, and private developers will use market forces (if it, as it seems, there is a demand for property at 5+ psf, they will build these). I think there will be more properties prices more reasonably, and the govt probably will set aside land for cheaper housing.

I also agree that if you consider dual incomes, the newer casino jobs pay HKD15+k each/month, affordability will also increase.

I think Citi's analysis is badly timed and flawed, with the latest .5% cut in interest rates, China inflationary pressures (rising RMB, wall of China money), Macau property is just about to get hotter again. If HK is just about to get negative interest rates, Macau is in deeply negative interest rates now. :)

nb LVS up 30% since open. This is probably the main leading indicator of what's happening to Macau.

Everybody knows those luxury buildings do not target the local people market. The intern analyst at Citigroup should have known that before writing it.;)

Hi MacauVillager28, ggaaxx: I agree with both of you. But I thought the analyst's data on confirmor is interesting. This is the first time I came across with that figure, and wonder if that really represents a very high level of speculation on historical basis.

Macau luxury prices are still cheaper than Shanghai, Shenzhen, Beijing, let alone HK (3-4x more expensive), Singapore, Las Vegas (where apparently it is still rising) etc.



I know Macau luxury is cheaper than Singapore and Hong Kong but was really surprised that you wrote it is cheaper than Shanghai, Beijing and especially Shenzhen. Are you sure about that?

Hi MacauVillager28, ggaaxx: I agree with both of you. But I thought the analyst's data on confirmor is interesting. This is the first time I came across with that figure, and wonder if that really represents a very high level of speculation on historical basis.

I think speculative buying has been on/off. When on, prices jump 30%, then pause. Last quiet quarter was when 1CR launched 4Q2006 after a boost when Wynn opend 3Q (I think there is a delay, so 1CR deals are reflected in 1Q07). Think it has been going on for a couple years. e.g. HKD1m range housing was bought up by a few thousand (maybe up to 7k) investment immigrants when they allowed it.
I have earlier noted that looking at the govt pty transaction figures, they represent something like 15% of all housing changing hands yearly (in other words, for the past few years (possibly back to SARS), transactions have been very hi (exceptionally) relative to size of market. (approx 3x HK, with most deals for units under construction).
What is happening to Macau is exceptional, noting like it anywhere in the world. So there is a risk and no one really knows what will happen (no luxury market, no expats previously). But as long as it pulls in the people, then people will buy. Hence, if LVS/Venetian is a hit, there will be more mega resorts, and there will be more buyers and expats coming in.

I know Macau luxury is cheaper than Singapore and Hong Kong but was really surprised that you wrote it is cheaper than Shanghai, Beijing and especially Shenzhen. Are you sure about that?

Big spending mainlanders perceive HK to be 'cheap' recently. Houses in Beijing have gone thru the roof, Shanghai is selling/asking at HKD10k psf (tho very limited transactions, its more like asking), Shenzhen up 50% in past year for new developments (ie HKD4-5k psf, so Tin Shui Wai was cheap at less than HKD3k). I went to property launches so last year they were asking for approx HKD5k psf for 'super luxury' in Beijing/Shanghai.
Shenzhen houses, which the gov is restricting, are going for something like HKD50m (look at Mission Hills golf villas). The developers are vying to be the first to get the RMB100m apartment !!

On its Oct 5th report, JP Morgan Cazenove issued comment as follow :

Since allegations of political corruption were revealed at the end of 2006, the Macau government
has been slow to grant new approvals to developers. This has impacted the project plans of
nearly all developers and has resulted in a slowdown in new sales launches..

While we maintain our market forecast for property prices to rise 15%
20% on average in 2007
and 10% pa in both 2008 and 2009, we believe that one unintended consequence of the current
bureaucratic slowdown could be an even more pronounced housing shortage
and ultimately
higher property prices. We had estimated up to 30,000 new residential units would be completed
in the next five years, but this figure is now subject to potential downward revision, even while the
economy continues to grow at a blistering pace (GDP rose 28.9% in 1H 2007). Our bullish view on
the Macau property market continues to be based on the mismatch between supply and demand,
as we believe that more than 75,000 new, relatively well
paid workers will be needed to staff the
gaming and ancillary facilities expected to come online during the next five years.

Two weeks ago, Polytec Asset released the first batch of units in Tower One of its Villa de Mer
project at list prices of up to HK$5,000 per sq ft (cash discounted price of ~HK$4,000 per sq ft)
to good demand. The other four towers at Villa de Mer had already been largely pre
sold in late
2006 and the first half of 2007,...

While Polytec waits to launch pre
sales of its next projects (either Lot T/T1 or phase one of Lot
P), average housing prices in Macau continue to strengthen and other developers continue to look
for deals. In the second quarter of 2007, the average transacted housing prices was up 41.3%
YoY and 13.7% QoQ, according to the government statistics bureau. More recently, Kerry
Properties (683 HK, NR) announced that it paid HK$1.2bn, implying an accommodation value of
HK$2,500 to HK$3,000 per sq ft, in July 2007 for a luxury site in the Nam Van Lake area. This
site would be Kerry Properties second in Macau.

Owners of domestic housing units that are rented out are likely to get tax breaks of up to 3,500 patacas (US$437.50) next year, alongside with owners of owner-occupied flats.

This was disclosed today by the Secretary for Economy and Finance, Mr Francis Tam Pak Yuen, after he had discussed the Government budget for the fiscal year 2008 with members of the First Standing Committee of the Legislative Assembly.

Instead of waiving real estate tax for all owner-occupied flats and halving it for rental units as proposed in the Policy Address last month, he said the government was considering a unified 3,500 patacas tax reduction for all domestic flats next year.

With this reduction, owners of about 90 per cent of some 210,000 such units in Macao will be exempted from the levy in 2008, said Mr Tam.

He said the Government was also poised to introduce a one- to three-year lock-in period for first-time home buyers who would benefit from a stamp duty waiver.

Should these flats be re-sold during the lock-in period, the original owner would have to pay the stamp duty that was exempted earlier.

In the Policy Address, it was proposed that the stamp duty be waived for first-time buyers for domestic properties valued up to 3 million patacas (US$375,000). This waiver would only benefit Macao citizens.

http://www.macaudailyblog.com/

RTHK online news
A public land auction in Macau has received overwhelming response from developers. This is the first land sales since the former secretary for transport and public works, Ao Man-long, had been indicted on serious corruption charges. Two residential sites went under the hammer at a total of 1.4 billion patacas - almost ten times higher than reserve price.

SCMP 10 Jan 2008

Macau's first public land sale in four years and only its second since it returned to Chinese rule attracted an overwhelming response yesterday, with two residential sites fetching more than 1.4 billion patacas.
Market watchers had forecast the sites would sell for 400m to 500m patacas each.
Jaime Roberto Carion, head of Land, Public Works and Transport Bureau, said the prices surpassed his forecast but declined to say if that should be taken as a sign of a bubble.
In contrast to previous land sales, which entailed mainly private negotiations, the two lots in Fai Chi Kei, on the Macau peninsula, were sold by tender. All 37 submissions were opened in full pubic view over eight hours, and local developer Tin Wai Investment was announced the winner of both.
The sale was the city's first following last year's trial of former pubic works minister Ao Man-long, who is accused of 76 counts of corruption and is awaiting the judgment.
The larger 18,342 sq ft site was sold for 555m patacas - 10 times the opening bid. That put its accomodation value - or the land price in terms of total planned floor area - at 3,025 patacas per sq ft, Ronald Cheung Yat-fai, chief executive of Midland Macau, said. An adjacent site sold for 867.93m patacas after bidding opened at 95m patacas, or an accomodation value of 3,016 psf.
Mr Cheung estimated that projects at the sites would have to sell at an average of at least 4,700 patacas psf.

Another interesting quote from another news article :

Macau General Association of Real Estate president Chong Siu-kin told reporters yesterday he expects the retail price to reach up to 5,500 patacas per square foot when the site is developed, predicting that the auction price will push housing prices in Macau up by 25 percent this year

Macau, welcome to hi HK-style auctions and land prices !!!

Remember reading about auction coming a few days ago, and that prices were expected to be hi due to number of bidders. However, forecast prices were not too special as site size not big so didn't mention it ...

Think site is next or very near sea near The Praia development (NW Macau).

The Standard, HK
Alfred Liu
Thursday, January 10, 2008

A site was sold at a government land auction in Macau yesterday for 555 million patacas (HK$541.45 million), 10 times higher than the reserve price.
The 18,000-square-foot site had a reserve price of 55 million patacas.

A total of two connected residential sites in Fai Chi Kei, located at the northern part of Macau peninsula, were sold through tender at Macau's second land auction since the 1999 handover.

Macau General Association of Real Estate president Chong Siu-kin told reporters yesterday he expects the retail price to reach up to 5,500 patacas per square foot when the site is developed, predicting that the auction price will push housing prices in Macau up by 25 percent this year.

The other site, with an area of 32,000 sq ft, had a reserve price of 95 million patacas and was sold for 867 million.

A Macau developer bid successfully for the two sites saying they have development potential.

But New World Development (0017) executive director Stewart Leung Chi-kin, who joined the land auction, said the transaction price was high.

The Land Committee said it had 37 tenders for the land auction.

Macau's last land auction, in 2004, drew more than three times the reserve price for a site of 1,000 square meters, which sold for about 68 million patacas.

Correction.. looks like gross area is 450k sf, so means can build up to 450 flats of 1000sf, so not so small esp if combined....

Think site is next or very near sea near The Praia development (NW Macau).
This two connected sites in Fai Chi Kei have full sea-view.
The developer who won the bid is also the same developer of The Praia development, near-by to this site.
Units at The Praia currently selling at $3000-3500psf. At the auction price of the new site, the developer expects the retail price will reach up to $5500psf after completion in 2 1/2 yrs, which is 70-80% higher than the present.
Some are saying, because it's the same developer as The Praia, ( at present, only 700-800 of the 1200+units are sold ), this could be his tactic to boost up the property prices around this area, or Macau as a whole.
Anyhow, even the editor of the Sing Tao Daily commented that this land auction marked a high demand in investment opportunity in Macau. In the year 2004, property prices in Macau is about 1/5 of similar ones in HK. Now it's about 1/2 or even 2/3 of the property prices in HK.
With the scarcity of prime land in Macau, & the more public land auction, as opposed to the previous private negotiations. The future for Macau property investment seemed pretty bright.

Macau-related stocks Shun Tak and Polytec have rallied more than 10% in last 2 days in response to the news of this land auction. Both these stocks are more liquid than MPO fund.

Good good good. My Macau is alive.

Press release
Speymill Macau Property Company PLC
04 February 2008


Speymill Macau Property Company plc ("Speymill Macau" or the "Company")

Speymill Macau Achieves 125% Return on Equity in US$160million Disposal

Speymill Macau Property Company plc (EPIC: MCAU.L), the Macau focused property
investment company listed on AIM, announces that it has agreed terms for the
sale of its interest in 243 residential units and car parking spaces in three
towers of a luxury waterfront development ("Lot U"), which it acquired in
December 2006 for HK$906.5million (US$116.5million).

The sale price will be HK$1.25billion (US$160.3million), representing a 2%
premium to the valuation as at 30 June 2007, and will generate a gross profit of
HK$343.6million (US$44.0million), yielding a gross return on the Company's
invested equity of 125%. The Manager has negotiated a transaction structure that
deals with the sale of individual towers one at a time following an agreed
payment schedule, generating cumulative net disposal proceeds of HK$615.5million
(US$78.9million) to Speymill Macau.

The disposal price for Lot U represents an asset value increase relative to
acquisition price of 38%, which compares favorably to the overall performance of
the Macau residential property market since acquisition.

The disposal of Lot U enables the Company to realise a substantial profit for
shareholders, in a cost and likely tax efficient manner. It also places the
Company in a strong position to pursue other attractive investment opportunities
which the Manager has identified in the Macau property market. Details of these
opportunities will be announced, as appropriate.

Commenting on the disposal, Larry Kearns, the Company's chairman, said, "The
disposal of Lot U secures a very attractive return to our investors but also
demonstrates the ability of San You Development, our development partner for Lot
U, to create attractive and well positioned residential products. We continue to
be strong believers in the growth of the Macau property market and I would like
to take the opportunity to thank our investors for their continued support of
the Company and its strategy."

For further information on the Company, please refer to the website at
www.mcau.co.im.

Before above announcement, Speymill Macau announced on 8 Jan the delay in the purchase of Bel-Lago due to delays.. (see Bel-Lago thread).

Guess 38% return for Lot U disposal, just over one year, in-line with market...

BLOOMFIELD HILLS, Mich., Feb. 1 /PRNewswire-FirstCall/ -- Centers, Inc.
announced today Taubman Asia is acquiring a 25 percent interest in The Mall
at Studio City, the retail component of Macao Studio City, a major mixed
use project currently under construction on the Cotai Strip in Macao,
China. In addition, Taubman Asia entered into long-term agreements to
perform development, management and leasing services for the shopping
center.

(Logo: http://www.newscom.com/cgi-bin/prnh/20051005/TAUBMANLOGO )

Taubman will fund an initial cash payment of US$54 million. Taubman's
total investment in the project (including the initial payment, allocation
of construction debt and additional payments anticipated in years two and
five after opening) is expected to be approximately US$200 million, with an
anticipated after tax return of about 10 percent, net of local Macao taxes.
The company's investment is in a joint venture with Cyber One Agents
Limited, the developer of Macao Studio City, and will be accounted for
under the equity method.

Taubman's payment will be placed into escrow subject to the following
conditions: eSun shareholder approval (the vote of which is expected in
approximately 90 days) and the execution and delivery of loan documents in
a sufficient amount, (along with equity) to build the project, expected to
occur within the first half of 2008.

Since its groundbreaking on January 10, 2007, Macao Studio City has
welcomed other brands including the Ritz-Carlton, W Hotels, Marriott, Asian
style icon, David Tang and Playboy Enterprises, to the more than US$2
billion project, offering international visitors, business travelers and
corporate customers a unique leisure and entertainment experience.

The Mall at Studio City will include approximately 140 stores,
including the ultimate collection of world-class luxury brands, many in
flagship formats. The beautifully designed two-level shopping center with
more than 600,000 square feet of leasable area will be accessible from all
components of the integrated resort. Macao Studio City is strategically
located Where Cotai Begins(TM), next to the Lotus Bridge immigration
checkpoint, linking the complex directly to Zhuhai's Hengqin Island.

"We are thrilled with the support and commitment Taubman Asia is
receiving from the global retail community for The Mall at Studio City. We
are confident that we will deliver the best shopping experience in the
region when we open," said Morgan Parker, President of Taubman Asia.

"Macao is fast developing into one of the most exciting travel
destinations in the world with a diverse tourist offering," said Peter Lam,
co-chairman of Macao Studio City. "And shopping is one of the favorite
activities of Asian travelers. Taubman's expertise, combined with Macao
Studio City's in-depth knowledge of Asian customers, will undoubtedly make
The Mall at Studio City the top choice for the millions of travelers who
visit Macao."

"With The Mall at Studio City, we are bringing Taubman's unparalleled
58- year retail development, leasing and management expertise to one of the
world's most exciting marketplaces. Retail sales in Macao continue to
register strong growth, with the most recent reports available recording
37% growth in the third quarter of 2007 when compared with the same period
in 2006. Outstanding categories include time pieces and jewelry which
enjoyed sales growth of more than 50% and adult apparel which grew at a
rate of over 40% year on year," said Morgan Parker. "We are creating a
world-class shopping venue that will leverage this growth, delight
customers, generate strong sales for retailers and provide excellent
returns to our shareholders."

Live and taped entertainment production activities will be brought to
the floor level of the shopping center, creating the ambience of "feel like
a star" among visitors in The Mall at Studio City, as they watch
celebrities being filmed and get a chance to participate in some of the
productions as interactive audience members.

"This entertainment-infused retail environment is unique to Macao
Studio City," added David Friedman, co-chairman and co-chief executive
officer of Macao Studio City. "Whether it's shopping, world-class
hospitality offered by our four hotels, or glamorous nightlife options,
including the Playboy Mansion Macao, fine-dining, cool lounges and live
entertainment, all the offerings at Macao Studio City are anchored together
to deliver the ultimate experience to our customers."

"Taubman's investment in The Mall at Studio City reinforces our vision
to be the place in Macao where super brands meet. The commitment of Taubman
and our other partners will ensure that Macao Studio City will be the
must-see, must-stay and must-return destination for visitors of Macao,"
said Ambrose Cheung, co-chief executive officer of Macao Studio City.

About Taubman Centers/Taubman Asia

Taubman Asia is a subsidiary of Taubman Centers, Inc. (NYSE: TCO), a
global leader of the shopping center industry. Taubman Asia focuses on
owning, managing, developing and acquiring high-quality and sustainable
retail real estate projects in Asia that leverage Taubman's strong retail
planning, design and operational capabilities. Taubman Asia is
headquartered in Hong Kong.

Taubman has been a pioneer of the U.S. shopping center industry for
over 50 years. Today, Taubman Centers owns and/or manages the most
consistent and productive regional mall portfolio in the U.S. including 24
regional and super regional shopping centers in 11 U.S. states. Taubman
Centers is headquartered in Bloomfield Hills, Mich. U.S.A. For more
information, please visit http://www.taubman.com.

About Macao Studio City

Macao Studio City is being developed by Cyber One Agents Limited, a
joint venture between New Cotai, LLC and East Asia Satellite Television
Holdings, a subsidiary of Hong Kong-based eSun Holdings ("eSun"; stock
code: 571). Singapore's CapitaLand owns 33.3 per cent of East Asia
Satellite Television Holdings while eSun Holdings owns the remaining 66.7
per cent.

eSun Holdings is one of Asia's leading media and entertainment
companies and an associate company of Lai Sun Development ("LSD"; stock
code: 488), a leading hotel and property developer. Both companies are part
of Hong Kong's Lai Sun Group.

New Cotai, LLC is a consortium of US-based investors, including the co-
chairman and co-CEO of Macao Studio City, David Friedman. Mr. Friedman is a
veteran resort and gaming developer who led Las Vegas Sands' entry into
Macao, and funds managed by Silver Point Capital, L.P., a private US-based
investment firm, and Oaktree Capital Management, LLC, a global independent
investment management firm.

CapitaLand is one of the largest listed real estate companies in Asia.
Headquartered in Singapore, the multinational company's core businesses in
real estate, hospitality and real estate financial services are focused in
gateway cities in Asia Pacific, Europe and the Middle East. The company's
real estate and hospitality portfolio spans more than 100 cities in over 20
countries. CapitaLand also leverages on its significant real estate asset
base, financial skills and market knowledge to develop real estate
financial products and services in Singapore and the region.

For more information, please visit http://www.macaostudiocity.com

This press release may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
statements reflect management's current views with respect to future events
and financial performance. Actual results may differ materially from those
expected because of various risks and uncertainties, including, but not
limited to changes in general economic and real estate conditions, changes
in the interest rate environment and the availability of financing, and
adverse changes in the retail industry. Other risks and uncertainties are
discussed in the company's filings with the Securities and Exchange
Commission including its most recent Annual Report on Form 10-K.
SOURCE Taubman Centers, Inc.

^^^^
Believe earlier announced that Taubman would be a 'partner' in the mall. Also that eSun may have had some difficulites raising finance due to turmoil in the credit markets.

see:
http://www.macautripping.com/tripping/post.php?p=162

Colliers International Macau has just released this interesting and bullish report about the Macau Property Market (http://macaudailyblog.com/macau-news/colliers-international-bullish-about-macau-property-market/).

By Kelvin Wong
Aug. 5 (Bloomberg) -- Carlyle Group, the world's second-
biggest private-equity firm, agreed to buy two apartment
buildings in the Chinese city of Macau from a local developer for
an undisclosed amount.
The firm will acquire the properties from Macau-based Sin
Kin Wan Group, according to a statement yesterday from Jones Lang
LaSalle, the sole agent for the project. The transaction is worth
about HK$2 billion ($256.3 million), Hong Kong's South China
Morning Post reported today, citing people it didn't identify.
Carlyle agreed to buying 372 apartments in Towers One and
Five at a development on Lot KL in the Pearl district of Macau,
the only place in China where casinos are legal. The deal also
includes the purchase of 372 car-park spaces, the agent said.
Macau has boomed since opening its casino market in 2002,
attracting U.S. investors such as Las Vegas Sand Corp. and Wynn
Resorts Ltd. Macau's government said in March the city's economy
grew 27.3 percent in 2007 from a year earlier, the fastest pace
in three years.

HONG KONG, Aug 5 (Reuters) - Private equity firm Carlyle Group [CYC.UL] has bought two residential towers in the Chinese casino enclave of Macau, a statement from the deal's broker said. The deal, announced by Jones Lang LaSalle, was worth about $250 million, the South China Morning Post reported on Tuesday.

A Carlyle spokeswoman declined to comment on the price the firm paid Macau developer Sin Kin Wan Group for two of the five 35-storey towers in the "Lot KL" project.

"We will work closely with the developer to transform these two residential towers into upper-end residences," Carlyle's head of Asia property, Jason Lee, said in the statement.

"Our first step is to enlist an international interior designer to refine and enhance the layout and finishes of the residential units as well as the clubhouse and other common facilities."

Macau, the only place in gambling-mad China where casinos are legal, is being churned up by a massive construction boom, with casino operators such as Las Vegas Sands (LVS.N: Quote, Profile, Research, Stock Buzz) building a "neon alley" on a strip of reclaimed land.

But apartment sales have slowed this year as the global credit crunch and economic slowdown raised questions about the pace of planned casino and hotel development.

Luxury residential prices have jumped 63 percent in the last three years, according to Jones Lang LaSalle, but a surge of new supply could keep prices down. Some 6,000 units are expected to hit the market next year, compared to nearly 3,000 this year and about 1,600 in 2007. ($1=7.803 Hong Kong Dollar)
>>>
SCMP also quoted someone as saying deal is a positive for the property market following past few months of negative news..
It also said that two blocks of above development earlier sold to another buyer for $3k psf.

SCMP also quoted someone as saying deal is a positive for the property market following past few months of negative news..
It also said that two blocks of above development earlier sold to another buyer for $3k psf.
At least this deal is encouraging from recent slowdown.

Jones Lang LaSalle facilitates a landmark sale

HONG KONG AND MACAU, 4 August 2008 - Jones Lang LaSalle as the sole agent is pleased to announce the successful sale of Tower I and Tower V of Lot KL, Macau, on behalf of the developer, Sin Kin Wan Group. The purchaser is The Carlyle Group, one of the world’s largest private equity firms.
Developed by Sin Kin Wan Group, one of the largest developers in Macau, Lot KL consists of five 35-storey residential buildings providing a total of 942 residential units scheduled for completion in mid-2009. Located in the Pearl district, Macau’s emerging, well-planned residential area, the development is adjacent to the future Light Rail Station and the proposed landing point of Hong Kong-Zhuhai-Macau Bridge. Notable residential projects in the locality include The Residencia Macau, La Cite and Villa de Mer. Sin Kin Wan Group has also appointed Jones Lang LaSalle as the Property Management Consultant for this development.

Tower I and Tower V of Lot KL comprise a total of 372 residential units and 372 car parking spaces, stretching a total residential area of approximately 600,000 sq ft gross. The residential units are all in three-bedroom layout, ranging in sizes from 1,582 to 1,603 sq ft. The entire development will come with a clubhouse and commercial amenities.

Mr Jason Lee, Managing Director of The Carlyle Group and Head of Carlyle Asia Real Estate Group said, ‘We see favourable demand for high-quality residential properties from expatriates and local residents. We will work closely with the developer to transform these two residential towers into upper-end residences. Our first step is to enlist an international interior designer to refine and enhance the layout and finishes of the residential units as well as the clubhouse and other common facilities.’

Commenting on the transaction, Jones Lang LaSalle’s Macau Managing Director, Mr Gregory Ku said, ‘We are honoured to have the opportunity to facilitate and witness this landmark residential investment transaction in Macau between one of the world’s largest private investment companies and one of Macau’s largest developers. This significant deal also reflects international investors’ optimism about Macau’s residential market and outlook in 2009 and beyond. This will be the case especially when the development of the Cotai Strip becomes more mature.’

Thursday, 02 October 2008

Macau’s property prices were expected to drop 30 to 40 percent by the end of this year, said Fong Chi Keong, president of the Macau Association of Building Contractors and Developers.

http://www.macaudailytimesnews.com/

opinions please because I will not selling my units at a loss

Good for every single macacanese...

Macau’s property prices were expected to drop 30 to 40 percent by the end of this year,

Market price is already down 15-20% from the peak in March this year.

I think it will depend on a few factors:
1. whether the Congress will agree on the bail out tomorrow night,
2. if China can continue to grow above 8-9% next few years,
3. if China will relax its visa policy.

All these factors will be beyond the control of Macau.

I am reluctant to believe it will be 40 percent as I doubt developers can make profit on new luxury properties at 2500 psf. Talked to one developer recently and he told me with wage increases, macau over protective labor market, inflation surging and hotel construction taking away all good labor one of his properties constructed today would be 40 percent more expensive

furthermore future prices will be the purchasing power of foreign investor

Look at the south of portugal, south of france, singapore (80 percent lives in public housing but the BLVD residence penthouse is selling for 48 Million Singdollar) you think most of the locals can afford the prices.......not at all......once the cotai and Macau becomes an international entertainment center and maybe off shore banking center and the locals who have not yet bought will be forced to move to Zhuhai as prices will go beyond what they can afford

I am reluctant to believe it will be 40 percent as I doubt developers can make profit on new luxury properties at 2500 psf. Talked to one developer recently and he told me with wage increases, macau over protective labor market, inflation surging and hotel construction taking away all good labor one of his properties constructed today would be 40 percent more expensive

You are referring to the problem on the supply side. But that is not the major concern NOW. The problem is on the demand side. All investors are scared; just look at the equity markets worldwide; the credit line is frozen. And if Congress reject the bail out plan tomorrow, all hell break loose. That is why I wrote it is beyond the control of Macau anymore, it is the global macro situation that we should be most concerned. Until the crisis is resolved, I think the buyers will just remain on the sideline. Hopefully, we don't have to wait too long.

I am of the believe property these days are treated not so much as somewhere people live, but rather just an investment. Like any other investment, in a down market the persimistic view sell (like drop 10-15% already, but it will go to 40, 50%), likewise in a upmarket 10000/sf, then 20000/sf etc, etc.

you just look at the volatility in global equity market, the so call blue chips can be traded like any other penny stocks, up and down by 20-30% in a single day. It shows the whole investment thing now is very much confidence driven.

I also believe the bust and boom cycle is progressively becoming shorter (because information travels very fast now not just to the institutions as in the past but also to every day citizen, thanks to internet, eg, news on todays paper is already too old).

This is why I constantly think the current cycle will reach peak to peak in 6-7 years max (10 years last time in HK, Asia), so ir you can see out the winter, full summer should hit in 2013, and you could see your property hitting magical figures.

Good luck, but in the mean time, maybe we all need to do what Macau Opportunity fund has done, get loans ready to see out the winter, and hope interest rate does not increase dramatically, and when it does increase, hopefully is not beacuse of credit squeese but rather economic activities picking up.

good luck all fellow investors.

Good for every single macacanese...

Just BUST already!
I am waiting to buy and have been commenting for a number of months on the ridiculous escalade of prices and on the whole thing being inflation driven.

Lets see what bargains show up as buyers approach Deed execution date and cannot afford to cough up the outstanding... Some may lose the deposit and waive the purchase, others will suck it up and hold on to units.

Same happened before, where people forfeited deposits of 1 Million on a 3 Million house just because the 1 Million deposit would suffice to buy 2 of those same 3 Million houses when the time to execute the purchase deed came...

For those who can afford to hold on, you are lucky, for those who will have to sell at a loss... sorry, you got what was coming!

Cheers

I am of the believe property these days are treated not so much as somewhere people live, but rather just an investment.

Well, I think both are relevant. Investors come in only when they expect a huge demand in the coming years, whether it is increasing number of expatriates and immigrants coming in to fill the jobs created or local natives upgrading from their old premises.



Good luck, but in the mean time, maybe we all need to do what Macau Opportunity fund has done, get loans ready to see out the winter, and hope interest rate does not increase dramatically, and when it does increase, hopefully is not beacuse of credit squeese but rather economic activities picking up.

good luck all fellow investors.

Good idea, thanks for the advise but just wonder what will happen if Macau banks refuse to provide mortgage loans on One Central and One Grantai? We sure need all the lucks!!!

but still macau is a tiny place, COD, galaxy and st regis new wynn all under construction
the bridge, the zhuhai- guangzhou LRT, the macau light rail, etc.....
if there is one place in the world where I would want to hold property it would be the macau - zhuhai region

so other areas in the world construction and public project have dried up, no new construction going on al least here everything is moving forward albeit at a lower pace

grantai and onecentral are only ready in a year or more so no problem and no immediate pressure on the buyer
if someone needs a mortgage in order to pay his deposit they clearly can not afford the unit and should not have bought it in the first place

Friday, 03 October 2008
Chairman of the Macau Association of Banks, Ye Yixin, said the local property market still had the "potential to grow" and he was convinced that Macau would be "strong enough" to overcome the global financial turmoil.
Mr Ye said there were always "ups and downs" in an economic cycle and Macau's property market was entering into a "consolidation period instead of declining", according to the local Chinese media yesterday.
Under the current global financial environment, he said investors should be "cautious" but also remain confident.
He emphasised that Macau's banking industry had a "stable and healthy" financial status and although some residents were affected by the rumour earlier about the collapse of two local banks, he said the majority of the public still "have faith in the industry".
Macau had US financial establishments but he said the SAR was "not directly affected" as the Chinese press reported.
In the 90's when Macau was in the era of economic downturn, property prices dropped rapidly which caused the prevalence in society of failing to repay house mortgage loans.
In addition, Fong Chi Keong, the president of the Macau Association of Building Contractors and Developers, said this week that Macau's property prices were expected to drop 30 to 40 percent by the end of this year as the market had entered a "critical period" which would last for 20 months.
However, Mr Ye said the industry was not in such "pessimistic conditions" and Macau's property prices were still "favourable" when compared with other Pearl River Delta regions such as Hong Kong and Zhuhai.
Also, the chairman said Macau's development was "getting closer and closer" to other international cities such as Hong Kong and with the construction of the Hong Kong-Zhuhai-Macau Bridge, he added that the SAR's property market had the "potential" to grow and that he had "never lost faith" in the market, according to the Chinese press.
On the other hand, Mr Ye said as long as the unemployment rate could be retained at a low level, "no significant impact" would be created for home mortgages, adding local employment would be increasing following "the diversified development under the leadership of the gaming industry".

He would say that, wouldn't he?
I mean, the guy couldn't exactly start screaming the end of days is approaching, sell while you can, could he?

I mean, the guy couldn't exactly start screaming the end of days is approaching, sell while you can, could he?

Sure, he could. The President of the Macau Association of Building Contractors and Developers just did that a few days ago.

read the James Lang Lasalle report on their Macau website its more objective

This is not just Macau story ....
Analysts (many equity) also predicting 30% fall in HK, Singapore, UK.
Most commentators likely to have a reason to stir things (eg in HK to push stocks down).
Macau fall predicted higher as it has gone up more....

This is part of a global story now... plus you add in local factors in all markets (eg supply, how much it has risen, recession). For Macau, add political interference from PRC (tho many other govts also interfer when market booms too much eg SG).

Macau's sharp price decline ' almost over '
November 5, 2008
SCMP
Prices in Macau's luxury property market have plunged by up to 40 per cent from their speculative peaks in March as the global financial crisis takes its toll.
But despite lingering concerns over the outlook for the economy in the city, some analysts believe an end to the sharp correction is in sight.

Lo Seng-chung, a vice-president of the Macau General Association of Real Estate, said prices in the secondary market had shown a more moderate correction of 15 to 20 per cent from their peak and noted that there was no panic selling by owners who were mostly end-users.

Mr Lo also said the Macau government was poised to introduce some "sweeteners" to boost sentiment in the market next year, timed to coincide with the 10th anniversary of the territory's reunification with the mainland.

On the cards could be tax rebates for homebuyers, he said.

Together with limited land supply in the 29.2 square kilometre city, this would underpin renewed confidence in the long-term growth of property prices in both the luxury and mass markets, analysts said.

But the optimism comes despite sharply negative data. Fewer than 500 properties in the luxury and mass markets changed hands in September and last month, data from the Macao General Association of Real Estate shows, compared with a two-month average of 2,500 over the first eight months of the year.

Deal volume in both markets this year was expected to be down about 50 per cent at 11,000, agents said.

Slowing transaction volumes were the result of the global financial crisis as well as measures by the mainland government to ratchet up restrictions on visa applications for mainland tourists to Macau five times in five months and the slowing growth of gaming revenue, analysts said.

"The average house price dropped 10 per cent in October alone and is now down 30 per cent from its peak in March," said Ronald Cheung Yat-fai, the chief executive of Midland Realty (Macau). "Some projects being completed which had attracted many speculators - such as One Central Residences - have seen prices drop from HK$8,000 per square foot to about HK$5,000 per square foot in the past six months."

Prices at One Grantai had decreased about 30 per cent, agents said.

One Central Residences and One Grantai are scheduled for completion next year.

The trigger for a drop of up to 40 per cent in prices of luxury developments was the sudden rush by cash-strapped speculators to offload their properties, Mr Cheung said.

News last month that Iceland's largest insurer, Sjova-Almennar Tryggingar, was offering to quit its investment in the 68-unit Tower Four under construction at One Central Residences had also badly dented confidence, he said.

The sharpness of the current correction in the luxury market was also because of speculation by overseas buyers at the height of the buying cycle that accounted for more than 60 per cent of sales in projects launched over the past few years and had pushed prices to unsustainable levels, analysts said.

But with this "froth" now out of the system, house prices would be subject mainly to the performance of global stock markets, said Mr Cheung, and further declines would be limited because prices at One Central Residences were nearing the HK$4,000 per square foot level at which the project was launched in 2006.

In addition, economic fundamentals had improved and some cash-rich investors had returned to the market in search of bargains.

In the retail market, rents were down 10 to 20 per cent from peak levels reached earlier this year, but agents said there was no sign that retailers were closing up shop and leaving premises vacant.

"Largo do Senado (a major tourist shopping area) remains as crowded as ever," said Rico Kwok Chiu-lung, an executive director for Ricacorp Properties. "Supply of shops in prime locations is limited and any vacancy that arises is quickly taken up by other tenants."

The drop in individual mainland visitors had been largely offset by an increase in the number of visitors from elsewhere in Asia, including India, Indonesia and Singapore, Mr Cheung said.

He said that once the global and mainland economic outlook became clearer, gamers would return to Macau's casinos, and the economy would regain its momentum therefore boosting the retail market.

In the longer term, the improvement of infrastructure development remained a key condition for the growth of prices in Macau's property market, analysts said.

Macau's sharp price decline ' almost over '
November 5, 2008
SCMP
Prices in Macau's luxury property market have plunged by up to 40 per cent from their speculative peaks in March as the global financial crisis takes its toll.
But despite lingering concerns over the outlook for the economy in the city, some analysts believe an end to the sharp correction is in sight.

Lo Seng-chung, a vice-president of the Macau General Association of Real Estate, said prices in the secondary market had shown a more moderate correction of 15 to 20 per cent from their peak and noted that there was no panic selling by owners who were mostly end-users.
Of course, if they are end-users they will live there, not buying to speculate

Mr Lo also said the Macau government was poised to introduce some "sweeteners" to boost sentiment in the market next year, timed to coincide with the 10th anniversary of the territory's reunification with the mainland.
Cool, December 20, 2009

On the cards could be tax rebates for homebuyers, he said.
More? Residents are already exempted of stamp duty and rebates do little to attract a population where 90% of the people earn under the exemption limits....

Together with limited land supply in the 29.2 square kilometre city, this would underpin renewed confidence in the long-term growth of property prices in both the luxury and mass markets, analysts said.

Land supply may be limited, there are already 20,000 + empty apartments built or approaching completion..



The drop in individual mainland visitors had been largely offset by an increase in the number of visitors from elsewhere in Asia, including India, Indonesia and Singapore, Mr Cheung said.
Yeah right, just walk Leal Senado square... you can? You didn't use to while the visas were unrestricted... I haven't seen thousands of indians or indonesians around either...

30,000 More Apartments Coming Onstream but Property Prices not Expected to Cool
Author: melody | Category: English, Property News According to a recent announcement by the Lands, Public Works and Transport Bureau (DSSOPT), more than 30,000 residential apartments are currently under construction or planned for construction. Some property industry insiders believe that completing these apartments in five years – 6,000 per year - is appropriate and will not lead to a decrease in property prices. Others, however, believe that prices depend on the forthcoming population policy. Since construction projects like the Hong Kong-Zhuhai-Macao Bridge and the Light Railway System are slated for launch by the end of the year it is anticipated that the demand for migrant labour will increase, thus benefiting the leasing market.

However, Chong Sio Kin, President of the Macau General Association of Real Estate remarks that even though building plans are already approved by the authorities developers will wait and see how the economic situation unfolds before committing themselves to construction projects, and believes the economic downturn may delay some projects. It is likely, therefore, that not all of the 30,000 apartments will be put on the market in the next few years. The increasing supply of new apartments has an indirect impact on property prices, yet there are still many other factors affecting prices, such as population policy and population status. If the government revives the quality migrant admission scheme or Investment Immigration Policy, then property prices will have firm ground to stand on.

Centaline (Macau) Property Agency Executive Director Kwok Chiu Lung said the government’s conservative processing of construction project applications has slowed the output of residential apartments on the market. He estimates that the market will see the appearance of an average four or five thousand new apartments every year, which is within expectations and will not dramatically cool property prices. As the supply of residential apartments is growing, potential demand will increase accordingly. In fact, there are many potential middle-class buyers with strong purchasing power who are living in older districts who have put aside plans to buy a new home as property prices remain high. As the purchasing power of these potential buyers becomes stronger and their desire for a new home even greater, it is believed that they will be able to ‘digest’ the new apartments to be marketed.

In addition, construction projects related to the Hong Kong-Zhuhai-Macao Bridge and the Light Railway System, which are planned to kick off by the end of this year, will require a great amount of imported labour, leading to an increase in the number of imported workers. Apartment owners who can afford to make a long-term investment will wait for the right time to lease their properties.

Relying on Macau to increase imported labour in order to maintain property prices is a dream. Imported labour is going down as far as it can go until it hurts.

No way all these projects going forward in that time span....
30k units is a lot of supply, with market as it is, there will be lots of delays (like in Singapore, which also has supply issues, and where some projects which have been part presold have also been delayed).
How on earth are they going ahead when they can't have any presales... eg what's happened with Windsor Arch ???
30k was old figure when Macau was crazy...

They won't even be able to get financing to do these projects under current circumstances...

However, imported labour bound to grow tho... City of Dreams opening soon, and much delayed Galaxy should come next year... and sooner or later, LVS will complete Sheraton, Shangri-la projects across the road from Venetian.

However, imported labour bound to grow tho... City of Dreams opening soon, and much delayed Galaxy should come next year... and sooner or later, LVS will complete Sheraton, Shangri-la projects across the road from Venetian.

Haha...you forgot about One Central Mall this year and Mandarin Oriental Hotel next year. As to Sheraton/Shangri-la projects, that is more difficult to forecast.

Macauvillage, you are right, they are old figures of everythings those were approved, including one central, one grantai, nova city, all the apartments at the pearl region, windsor arch, etc, etc,

most of those have already have a large chuck of it presold, except windsor arch. Indeed since the arrest of the one famous Ao, almost no projects have been approved, so Macau has a 2 years gap in property supply in the future.

Again, this is another misleading piece of information out there, making it sound as though 30k apartments are going to hit the market any time soon, the truth is almost 1/3 of those are properly presold (in the boom years), the rest probably do not even have foundation works done yet, then after that, no more supply unless the government approves more projects.

Stamp duty revision withheld - any update on this?
Excerpts from article 03 April.

Proposal for a progressive tax rate from one to three percent based on the values of the real estate.
Property worth two million patacas or below will have a one percent stamp duty; over two million to four million patacas the tax rate will be at two percent; whilst for over four million patacas the stamp duty is set at three percent.

The committee will make a decision as soon as possible, as the stamp duty revision is a “sensitive topic and many property transaction contracts have been put on hold as buyers are waiting for the tax deductions.”

16/04/2009 14:00

Macau tipped as China's latest 'foreign property hotspot'

Macau has been tipped as an ideal location for foreign property investment due to rising tourism and development in the Chinese region.

An expert from the foreign property portal Homesgofast.com believes that the former Portuguese colony also benefits from sustainable growth rarely seen in other areas of the country.

Nick Marr, chief executive of the website, highlighted gambling as Macau's biggest revenue driver.

He said: "The love of gaming and casinos by both the local and international population stands this region in good stead for long-term investment.

"With new casinos being built and a huge amount of tourism to the region, it seems a very exciting prospect."

He added that the region had now overtaken previous foreign property "hotspots" in China such as Hong Kong and Beijing for investor attraction.

At last.... a ray of sunshine in Macau

:)

Well, that is pretty much the same believey as why I believe a few of the people on this forum are investors in Macau (the Macau story).

That story has not really changed, if anything, beacause of the financial crisis, it has be accelarated by the Beijing government, now we just need the corporates to come back in (and they will after stablisation), a few more reports like the above one, then private investors will come back and good times will roll again.

good luck.

At last.... a ray of sunshine in Macau

:)
Yes, at last .............
Starting from previous week, more inquiries from Macau agents on my unit at 1CR. ( actually I never put my unit on the market, did not know how they got my contact ).
Even though prices are still disappointing, hopefully it's an indication that market has started to move. And more good news to follow.

Well, that is pretty much the same believey as why I believe a few of the people on this forum are investors in Macau (the Macau story).

That story has not really changed, if anything, beacause of the financial crisis, it has be accelarated by the Beijing government, now we just need the corporates to come back in (and they will after stablisation), a few more reports like the above one, then private investors will come back and good times will roll again.

good luck.

SCMP article today on March gaming figures. 1Q first quarterly growth in 3 quarters (compared to previous quarter) of approx 8%, tho still down compared to last year (but less down than previous quarters).
Also some anecdotal evidence of relaxation of visas for visitors from China.

So news is getting more and more positive in the lead up to Melco's City of Dreams opening....

VIPS also boasted gaming (tho VIPs make up most market, so not surprising).

I sometimes wonder what is more important. Visitor numbers (and visa policy) or VIP gaming revenue for Macau (and property market) ?

If VIPs, then health of stock market (and mainland economy) maybe more important indicator. So much of the boost in gaming due to China stock market rising than visas, actual health of Chinese economy ??
VIPs contribute less in terms of hotels, and general spending since they make up such a small portion of retail market, tho they spend big in gaming (and profits for casinos).

The Brits well known and not so liked for pushing up property prices in places like Spain, Portugal and South of France

Macau property attracting buyer interest from UK

Brits considering upping sticks and moving abroad are starting to take a growing interest in the Chinese property market of Macau.

Nick Marr, chief executive of Homesgofast.com, said that the city stands in "good stead for long-term investment".
"My tip would be to look closely at the Macau region. It is also known as the Las Vegas of the Far East and seems to tick the right boxes for good investment potential," he recommended.

He added that previous hotspots for British people seeking property in China included Shanghai, Beijing, Hong Kong and Shenzhan.
The National Bureau of Statistics of China recently reported that urban residential property prices in China's 70 major cities increased by 0.2 per cent last month compared to February.

Packing up life in the UK to head overseas is no mean feet. Those re-locating abroad can take the hassle out of moving by storing non-essential home contents and belongings.
Written by Jenifer Courtney

Here's newswire report, similar to SCMP mentioned above


DJ MARKET TALK: Macau Plays Strong; 1Q Gaming Revenue +8.1%
2009-4-20 11:59:00 a.m. HKT, XFNA

1141 [Dow Jones] Macau plays on a roll, likely getting boost from news 1Q09 gaming revenue +8.1% on-quarter at MOP26.02 billion, according to Macau's Gaming Inspection and Coordination Bureau. Too early to say if rebound will continue, but if trend sustained, could potentially be re-rating catalyst for sector, as signals gaming enclave's bad luck may have started to turn, with 1Q uptick following 3 consecutive -on-quarter revenue drops, as tighter visa restrictions on mainland visitors hit casino operators. Galaxy Entertainment (0027.HK) +5.6% at HK$1.51, Melco International (0200.HK) +6.5% at HK$3.26, SJM Holdings (0880.HK) +5.1% at HK$2.08. Most flirting with year-to-date highs hit around Jan. 7, likely near-term targets. Volume modest so far.(RLI) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com

^^^^

Wonder if you were stock investor, which one is best ??
I picked galaxy recently, but this was no real reason. I admit Melco has attractions given it is about to open. However, I think generally Macau news affect them similarly.

DJ MARKET TALK: Morgan Stanley Turns Bullish On Macau Gaming,Ppty
2009-4-22 11:17:00 a.m. HKT, XFNA

1104 [Dow Jones] Morgan Stanley gets more bullish on Macau gaming, property sectors on "visible signs" of improvement in visitor arrivals, gaming revenue. House upgrades Melco (0200.HK) to Equal-weight vs Underweight, raises target to HK$3.30 vs HK$2.50; raises Galaxy (0027.HK) to Overweight from Equal-weight, ups target to HK$1.80 vs HK$1.50; keeps Shun Tak (0242.HK) at Overweight, ups target to HK$3.20 vs HK$3.10. Tips Macau gaming revenue to recover in 2H09, after dropping 11% in 1H09; revenue to further rise 16% in 2010. Says faster processing rate of visas at Macau borders, Macau government's stimulus packages will boost property sector; casino operators will also benefit from commission caps. Galaxy up 11.9% at HK$1.60, Melco up 8.7% at HK$3.51, Shun Tak up 5.9% at HK$3.03. (ARP) Contact us in Hong Kong. 852 2802 7002;

DJ MARKET TALK: Morgan Stanley Turns Bullish On Macau Gaming,Ppty
2009-4-22 11:17:00 a.m. HKT, XFNA

1104 [Dow Jones] Morgan Stanley gets more bullish on Macau gaming, property sectors on "visible signs" of improvement in visitor arrivals, gaming revenue. House upgrades Melco (0200.HK) to Equal-weight vs Underweight, raises target to HK$3.30 vs HK$2.50; raises Galaxy (0027.HK) to Overweight from Equal-weight, ups target to HK$1.80 vs HK$1.50; keeps Shun Tak (0242.HK) at Overweight, ups target to HK$3.20 vs HK$3.10. Tips Macau gaming revenue to recover in 2H09, after dropping 11% in 1H09; revenue to further rise 16% in 2010. Says faster processing rate of visas at Macau borders, Macau government's stimulus packages will boost property sector; casino operators will also benefit from commission caps. Galaxy up 11.9% at HK$1.60, Melco up 8.7% at HK$3.51, Shun Tak up 5.9% at HK$3.03. (ARP) Contact us in Hong Kong. 852 2802 7002;
^^^^
They all managed a 9%+ gain at today's closing. Despite a 3% down on the Heng Seng index. Shun Tak are among the 50 most actively traded stock today, closed at $3.14, up almost 10%.

^^^^
They all managed a 9%+ gain at today's closing. Despite a 3% down on the Heng Seng index. Shun Tak are among the 50 most actively traded stock today, closed at $3.14, up almost 10%.

Galaxy up almost 20% at one stage... so took profits.
Will go back in at lower level... and keep until at least 100% :)

Guess Morgan Stanley answered my question !!

Galaxy up almost 20% at one stage... so took profits.
Will go back in at lower level... and keep until at least 100% :)

Guess Morgan Stanley answered my question !!
Well done! :cheers:

Progressive structure for property stamp duty outlined
Tuesday, 10 February 2009

The government and the standing committee reached a consensus to introduce a progressive structure of rates for property transfer stamp duty, Cheang Chi Keong, the president of the committee said yesterday.
"If an apartment is valued less than two million patacas, the stamp duty will be one percent, if the value is between two million and four million patacas, the tax will be two percent, and if a flat is worth over four million patacas the tax will be three percent, " Cheang said.
In case when the apartment is valued at five million patacas or above, all the three taxes will be applied, he added.
In line with the 2009 Chief Executive Policy Address to reduce financial burden of local residents, the government presented the bill to the Legislative Assembly with an aim to cut the stamp duty from three percent to one percent.
The stamp duty, according to Cheang, will be applied in the initial contract and also in the final contract for purchasing an apartment, and will as well validate the final purchase of the property.
During the meeting yesterday the lawmakers made three suggestions to the government.
The first was regarding the two percent duty paid between a two million pataca and a four million pataca apartment, in which some lawmakers said the price range should be "broader".
They also proposed more flexible options for stamp duty rates since the bill, if passed, will affect contracts that were signed since January 1 this year.
Other lawmakers also suggested a decrease in other kinds of fees arisen when buying an apartment.
According to the Finance Services Bureau (DSF) in 2007, 75 percent of the apartments for sale were below two million patacas.
As for flats over two million and three million patacas there were 10.3 percent.
In 2008, 74 percent of the apartments for sale were below two million patacas, and for over two million and three million patacas there were about nine percent.
For first time home buyers who purchase a flat valued at three million patacas or below, the government will continue to waive their relevant stamp duty.

The lawmakers yesterday again gave a
tough time to Secretary for Transport
and Public Works Lau Si Io, who tried
to put through the government’s bill in relations
to the Home Purchase Credit Guarantee
Scheme.
Yet, by a vote of 16 to 2 the bill passed the
final reading at the Legislative Assembly
(AL) so that the government will assume a
700 million pataca debt in order to provide
20 percent down payment guarantee for eligible
first home buyers.
Six other lawmakers including Fong Chi
Keong, Kwan Tsui Hang, Leong Iok Wa and
AL vice president Lau Cheok Va abstained
from voting.
The actual Home Purchase Credit Guarantee
Scheme will be gazetted as an administrative
regulation – which does not need to
go through the legislature.
Continues on

Part of the issue is they are afraid people will buy a flat they can not really afford. There is also risk of negative equity - will the government subsidise this?

If one can not afford basically interest free loans (with interst rate much less than the 4% subsidy), plus effectively spreading payment of today's cost over 20 or so years. Then I think you should never buy anything.

Wish I could buy any property 20 years ago interest free, then inflation kicks in, the same money today is for sure not worth what it was 20 years ago. it's a bbbbbbargain.

If this sort of proposal exist in any one so call western country, you would for sure have absolutely no drop in property value.

agree, if I could qualify I would jump on it, in 5-10 years time nobody who buys property today will be in negative equity, pricing is reasonable, land limited and the economic prospect on the medium to long term very good. With all the quatitive easing happening around the world, inflation will be back with a vengeance.
Better protect youself against devaluation of money by picking up reasonable priced property.

article

China fears bond crisis as it slams quantitative easing

China has given its clearest warning to date that emergency monetary stimulus by Western governments risks setting off worldwide inflation and undermining global bond markets.

By Ambrose Evans-Pritchard
Last Updated: 1:13PM BST 07 May 2009

Comments 33 | Comment on this article

"A policy mistake made by some major central bank may bring inflation risks to the whole world," said the People's Central Bank in its quarterly report.

"As more and more economies are adopting unconventional monetary policies, such as quantitative easing (QE), major currencies' devaluation risks may rise," it said. The bank fears a "big consolidation" in the bond markets, clearly anxious that interest yields will surge as western states try to exit their QE experiment.


"There is a significant shift taking place in China. They are concerned about the stability of the global financial system so they are not going to sell US bonds they already have. But they are still accumulating $40bn of fresh reserves each month, and they are going to be much more careful where they invest it," he said.

Hans Redeker, head of currencies at BNP Paribas, said China is switching into hard assets. "They want to buy production rights to raw materials and gain access to resources such as oil, water, and metals. They know they can't keep buying bonds," he said

Premier Wen Jiabao left no doubt at the Communist Party summit in March that China is irked by Washington's response to the credit crunch, suspecting that the US is engaging in a stealth default on its debt by driving down the dollar. "We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets. To speak truthfully, I do indeed have some worries," he said.

Days later, the central bank chief wrote a paper suggesting a world currency based on Special Drawing Rights issued by the International Monetary Fund.

Some economists say China is suffering from "cognitive dissonance" by anguishing so much over its reserves, accumulated as a result of its own policy of holding down the yuan to promote exports. Quantitative easing by the US Federal Reserve and fellow central banks may have saved China as well, since the country's growth strategy is built on selling goods to the West.

China's fears of imported inflation may reflect its concerns about over-heating. The M2 money supply rose 25pc in March on a year earlier, and there has been explosive credit growth since the government relaxed loan restraints. There are concerns that the stimulus is leaking into a new asset bubble rather than promoting job growth. The Shanghai bourse is up over 50pc since November

Gold: investor demand soars amid inflation fears
Gold investors continued to flock to the safe-haven metal in the first quarter as fears of future inflation and ongoing financial uncertainty continued.

By Paul Farrow
Last Updated: 11:34AM BST 20 May 2009

Total demand for gold in Q1'09 rose 38pc year on year to 1,016 tonnes, representing a 36pc rise in value terms to US$29.7bn.

According to figures published today by World Gold Council (WGC) in its Q1'09 Gold Demand Trends report, identifiable investment demand for gold, which includes exchange traded funds, (ETFs) and bars and coins, was the major source of growth in the quarter, reaching 596 tonnes, up 248pc on Q1'08.


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Gold: Gordon Brown's decade of regret? The figures, compiled independently for WGC by GFMS Limited, reveal a record level of investment into ETFs with demand soaring 540pc to 465 tonnes at a value of US$13.6bn.

Net retail investment (total bar and coin demand) remained highly robust, rising 33pc year on year to 131 tonnes, despite some bar and coin dishoarding in eastern markets as investors took profits. Germany was the single biggest bar and coin market in Q1'09, where demand rose 400pc on Q1'08 to 59 tonnes, with inflation concerns being a key buying motivator.

The impact of the recession on consumer discretionary spending continued to take its toll on both jewellery and industrial demand. Gold jewellery demand was down 24pc on year earlier levels, with most countries suffering a decline as consumers responded to the high and volatile gold price, which reached record levels in some countries, compounded by difficult economic conditions.

Total demand in India, traditionally the world's largest gold market, declined significantly under pressure from record rupee prices and a major deterioration in the domestic economy. Demand fell 83pc on year earlier levels to just 17.7 tonnes.

Industrial demand for gold in Q1'09 was 31pc down on Q1'08, with the electronics sector being the major contributor to this decline. End user demand for electronics goods has been badly affected by the downturn in consumer spending on items such as laptops and mobile phones.

Aram Shishmanian, CEO of World Gold Council, said: "There has been a seismic shift away from capital appreciation towards wealth preservation and we believe this trend will define investment behaviour in the next decade.

"Gold, as one of the few assets that has held its value during the current economic crisis, has been sought out by investors who are drawn to its proven protective attributes as well as safeguarding themselves from the erosive effects of future inflation.

"The shift in the balance of demand that we have witnessed this quarter, where the gold price has risen despite a severe drop in jewellery and industrial demand, perfectly demonstrates the robust nature of gold's fundamental supply and demand dynamics.

"While jewellery demand is unlikely to return to more positive territory in current market conditions it remains a key market driver. Affinity for gold jewellery remains and we are confident that demand will grow as consumer confidence and purchasing power returns."

Bank on inflation and invest in real estate, says Li

Alfred Liu

Friday, May 22, 2009

"Superman" Li Ka-shing says real estate remains a good investment as inflation is inevitable, while stock investors should exercise caution.
"Following low interest rates, inflation will come," the chairman of Cheung Kong (Holdings) (0001) said. "When it comes, it will increase the cost of home financing. If you have stable income, it's pretty good to buy property."

He added: "If you hold your property for three to four years, you don't need to worry about property investment."

Regarding other investment options to combat inflation, Li said: "I'm also asking myself that question."

The richest man in Hong Kong warned that an economic recovery may not be imminent, even after the recent upswing in the stock market.

"Recovery of the stock market usually comes before [that of] the economy, but it's hard to be sure every time."

The Hang Seng Index has surged more than 20 percent from two months ago, but Li said investors should exercise caution.

"If you ask me whether the stock market can go higher, it's highly possible. But be careful, the economy still has many problems," he warned.

He dismissed fears about the huge amounts of capital leaving Hong Kong, saying that the impact on the economy should still be slight given the huge market capitalization of companies.

Li, also chairman of ports-to-telecom conglomerate Hutchison Whampoa (0013), said export businesses everywhere are performing badly, recording more than 20 percent declines from early this year. However, he expects some growth over the coming months.

In the wake of the recent controversies over the privatization of other listed companies, Li said it is difficult to privatize firms in Hong Kong because of its complicated laws.

"The easiest way to do it is to announce a complete closure of the company," he said. "Anyone who wants to stir up trouble will make privatization absolutely impossible."

"I am not referring to PCCW," the father of PCCW (0008) chairman Richard Li Tzar-kai added.

Li said Hong Kong laws related to privatization are complicated as they were drawn up with reference to the United States and Britain.

"If there's anything wrong or unreasonable, change is needed," he said. The billionaire also expects China to be the first country to recover from the financial crisis.

Though earnings from his hotel businesses in Shanghai and Beijing have dropped between January and March this year, Li expects occupancy rates in June and July to increase 20 percent from today's levels.

Li also thinks the mainland real estate market's recovery will be gradual. He said he is still buying land there and has never sold any undeveloped land in the mainland.

Analysts bet on property

Alfred Liu

Wednesday, May 27, 2009

Analysts continue to be bullish about Hong Kong property as abundant liquidity has led to all-time low interest rates.
JPMorgan expects local residential prices to increase 10 percent this year from a year ago, compared to its previous forecast of a 20 percent drop. The brokerage also estimates prices will rise 5 percent next year. "We turn more positive on the Hong Kong economy" which should gradually recover in the second half of the year, it reports.

"Given ample liquidity - which we believe is reflected in the historical low one-month interbank rate of only 0.087 percent - and positive news flow from new launches, the sector is likely to rise to above-mean valuations in the near term," the report adds.

ADVERTISEMENT


The brokerage has raised its target price for Cheung Kong (Holdings) (0001) by 16 percent to HK$87, for Sun Hung Kai Properties (0016) by 37 percent to HK$96, and Henderson Land (0012) by 28 percent to HK$46.

Local property stocks extended their rally yesterday with low interest rates driving up demand for real estate.

Sino Land (0083) advanced to a nine- month high, climbing 8.74 percent to end at HK$13.94, while New World Development (0017) rose 5.22 percent to HK$14.52.

Cheung Kong added 2.48 percent to HK$91 and Sun Hung Kai Properties gained 1.93 percent to HK$92.65.

In general, JPMorgan sees 5 percent to 20 percent potential share price upside.

Merrill Lynch said it believes property prices will increase 5 percent during the remainder of 2009 and 5 to 10 percent in 2010. The investment bank prefers Sun Hung Kai Properties over Cheung Kong.

"We view SHKP as the `Prada of HK developers,' a reputation recognized locally and among wealthy mainland Chinese buyers," Merrill Lynch said.

For the overall market, "We believe sentiment has clearly improved, particularly with clarity that China is on its way to attaining its 8 percent GDP growth target in 2009, and signs the financial markets may have bottomed."

Rejuvenation

Posted: 5/25/2009 6:28:21 PMBullish real estate agents report hard evidence that the property market is on its way to a full recovery

The month just passed can be seen as a watershed for the local property market as the gloom of the global financial turmoil is finally receding.
In the past 30 days the housing market showed the clearest sign yet of recovery from dismal sales over the last eight months, according to several estate agencies in Macau.
“Transaction volume is up significantly and average home prices have risen by about five percent. The rebound of Macau’s housing market mainly reflects a change in economic sentiment in neighbouring regions where we have seen property values go up by as much as 20 percent in recent weeks in Shenzhen and Hong Kong, for example,” says Ronald Cheung of Midland Realty.


Buying power

Earlier stimulus measures introduced by Beijing to kick-start the mainland economy are slowing paying off, boosting confidence in Macau. Cheung points out that since local property transactions have been chilled for almost a year, the market has accumulated considerable buying power, which is expected to be unleashed in the second half of this year.
Sales of mass properties priced below three million patacas already began to pick up momentum early this year.
And now this momentum is spreading to high-end properties.
According to Sek Po Tak, regional director of Centaline Macau, the number of housing transactions valued over MOP10 million has increased lately, signalling the loosening of purse strings among potential buyers.
“A villa in Cheoc Van on Coloane Island sold for MOP17.5 million last month. This is a 40 percent discount from its original asking price of MOP30 million,” Sek remarks, adding that the drastic drop in the price of luxury properties over the past year has made them very attractive to both end-users and investors.
Several estate agents have told Macau Business that there are now more foreign investors hunting for bargains in Macau.
They believe the market outlook for the second half of this year will be bright.
“The downward spiral of home values has been reversed. I think Macau’s overall housing prices will go up 15 percent to 20 percent this year,” suggests Rico Kwok of Centaline Macau. He also reveals that his firm is taking a cautiously optimistic approach to the possibility of reopening several branches which folded last year due to the recent downturn.

More good news ahead

It is believed the latest announcement that the 4-percent interest rebate on mortgage loans proposed by the government will apply to both completed units and off-plan properties, will add a further boost to domestic demand.
The move has been warmly welcomed by the Association of Real Estate Developers, which says it gives homebuyers more choices.
Meanwhile the association urges the government to implement the proposal – floated last November – as soon as possible so as not to miss the opportunity of a real recovery and help local people get on the property ladder.
Regarding the anticipation of more stimulus measures from the government, many industry observers are now looking forward to December when the next chief executive of Macau takes office.
They are hopeful that Beijing will unveil favourable policies to bolster Macau’s economy in order to show support for the new leader as it has done so in the past.
They also suggest that the next chief executive will be very likely to resume the property investment residency scheme that was suspended in early 2007 amidst the property boom.
“The scheme should have been revised and reintroduced last year. But unfortunately the hands of the incumbent chief executive are tied as he is leaving office soon. So I think the new leader will look at this scheme seriously once he takes office because the healthy development of the property sector is vital to any economy,” says an analyst who declined to be named.


by Alan Tso
Charts and graphics in our paper edition and MB online browseable edition

They also suggest that the next chief executive will be very likely to resume the property investment residency scheme that was suspended in early 2007 amidst the property boom

First let's see who is going to be the next Chief Executive ...

I think its going to be you

Macao Aims to Turn a Corner in Battle With Recession
Alex Frew McMillan for The International Herald Tribune
The One Central development in Macao.

Published: May 29, 2009
MACAO — The seven towers of the One Central development look a little like a dragon’s rolling body, with its silver head pointing out to sea. And at the moment there is a crane atop that head, as developers hurry to complete the residential part of the massive mixed-use project by August or September.

The development’s 796 luxury apartments will single-handedly drag the quality of the housing stock in this former Portuguese colony up a notch. And Macao, now an autonomous special administrative region of China, is looking forward to the lift.

Like a player on a bad streak at the tables, little had been going right for the city in recent months, even though it recently replaced Las Vegas as the world’s largest gambling market by total revenue. But there are signs of improvement. Property transactions, which had slumped to a 24-year low, are picking up. The city is preparing to elect a new administration, which should get a stalled construction permitting system back on track and may produce a new economic stimulus package. And visa restrictions for mainland visitors are easing, so more gamblers should soon be on their way.

But for now casino construction continues to be in limbo. Across the Cotai Strip from the world’s largest casino, the 51,000-square-meter, or 550,000-square-foot, Venetian Macao, loom the concrete skeletons of the Shangri-La, Sheraton, Traders and St. Regis hotels and their companion casinos. Slated to open last year, construction on all the projects has been stalled indefinitely due to financial problems with the developer, Las Vegas Sands Corp.

Developers have been unable to get construction permits since the 2008 conviction of Ao Man-long, Macao’s former secretary for transport and public works, on bribery and money laundering charges related to building approvals.

Macao’s chief executive, Edmund Ho, is scheduled to step down Dec. 19. Until there is a new government, “there is nothing positive in the market,” said Piers Brunner, chief operating officer for Asia for the real estate brokerage Colliers International.

That sour outlook was reflected in the city’s housing statistics: Only 311 apartments were sold in January, the slowest month since June 1985. But, in March, 960 apartments traded hands, still well off the pace in 2007 but more than triple the January tally.

Prices for apartments of more than 150 square meters have dropped 36 percent in the past year, to 27,243 Macanese patacas a square meter, or $316 a square foot, according to government figures. (Macao’s real estate is commonly measured in square feet, and high-end properties generally are valued in Hong Kong dollars, but the government report used square meters and patacas.)

That reflects the sharp correction that has taken place in a market that, at least briefly, was soaring. In 2006, when One Central rapidly sold 80 percent of its units at prices around 6,000 Hong Kong dollars a square foot, a high-water mark for Macao, other developers hurried to start their own projects.

Macao’s aging housing stock has never had much in the way of luxury housing. And what little existed was rapidly absorbed by an influx of new residents when the city ended a gambling monopoly in 2002. At the end of last year, it recorded 549,000 residents, a quarter more than at the start of this decade.

One of those newcomers is David Ogilvie, the office manager of the British Business Association of Macao. He says the place he rented for five months in Hong Kong cannot compare with the 600-square-foot apartment in the Flower City development where he lives now.

“It is about three times the size as my apartment in Wanchai, in Hong Kong, and almost half the price, while still being in a prime position in Taipa,” he said, referring to one of Macao’s islands. For younger professionals on tighter budgets, “the standard of accommodation here is, in my view, substantially better than Hong Kong.”

And, with the opening of One Central Residences, the luxury end of the market will improve too. The project, which will include a Mandarin Oriental Hotel due to open next year and a top-end shopping center, is a joint venture between Shun Tak Holdings and Hongkong Land.

“One Central is definitely going to be the premier luxury complex in Macao,” said Juliet Risdon, director of the Macao-based real estate brokerage Risdon, Lawson and Lo. “There’s no doubt, given the involvement of those brands. It’s going to be stunning.”

Yet the results of the global economic downturn and Macao’s stalled bureaucracy are visible across the Lago de Nam Van from One Central, where the so-called “C Lots” stand empty. Developers like Kerry Properties, one of Hong Kong’s best-known luxury builders, and Tenacity Real Estate Group are still waiting for permits and approvals, though Kerry still says its luxury 400,000-square-foot apartment building will be ready in the second quarter of 2012.

Similarly, only soil testing has been done on the site of Bel Lago, a joint venture between Pak Keng Van Property Investment and LaSalle Investment Management. But the companies say the project will happen — eventually.

Other reasons for optimism: A major casino, the City of Dreams, is to open on June 1 and a stimulus package from the mainland government is expected as the new chief executive takes office in December and the city celebrates the 10-year anniversary of its return to China.

An investment visa, which grants Macao residence to property buyers, may be reinstated then too. But real estate executives say the threshold may be 3 million to 4 million patacas, rather than the one million level that was in place when the program was suspended in 2007.

I think its going to be you

Did I hurt someone here? Or are you feeling bore today?

just joking around

^^^^
A beautifully written piece, esp if UR a 1CR owner..... :)
Never thought of a dragon !

Interesting to see that demand may be on the rebound.

Have been looking at supply issues. From recent G Sachs conference, LVS indicated that they will try to change 4 Seasons condo registration to residential, but not sure if that will work. From Recent Lawrence Ho interview they will not launch apartments at COD until they see how 4 Seasons goes. That seems to indicate no sales of flats on Cotai this year.

Grantai and Buckingham continue construction. The Praia ?? Windsor Arch halted construction. Hear Royal Arc sales not going well.

One Central looking more positive - but no mention of Finnish pension fund that owned one tower.

Interesting to see that demand may be on the rebound.

Have been looking at supply issues. From recent G Sachs conference, LVS indicated that they will try to change 4 Seasons condo registration to residential, but not sure if that will work. From Recent Lawrence Ho interview they will not launch apartments at COD until they see how 4 Seasons goes. That seems to indicate no sales of flats on Cotai this year.

Grantai and Buckingham continue construction. The Praia ?? Windsor Arch halted construction. Hear Royal Arc sales not going well.

One Central looking more positive - but no mention of Finnish pension fund that owned one tower.

Thank you for keeping us updated.

Hi guys. I know the Residencia is probably not as hot as 1CR, but I have just received my papers to pick up my flat there, and is quite excited.

You guys think it will do half as well as 1CR? Frankly speaking, it is only 5 mins away from the casino area (by car), so I'm not sure why the huge price discrepancy with those of 1CR or buildings in the casino area.

I heard they will start development of the LRT in that area soon, or has this been talked about for many years already? Any idea what the rent would be for the Residencia?

Thank you guys. Happy New Year!

Hi all,
it seems to me that property prices have gone up substantially in the last 12 months.
wonder if it's still a good idea to invest in a unit there...:?
hmmm....and could anyone advise me on what is the average psf for new properties in HK vs in Macau?
Really appreciate any other advice! :)

Most foreigners in Macau tend to invest it the top "Luxury" sector. It Macau, the top price is probably 6000-7000/sf, which got to as low as 4000-5000/sf during the crisis, but still substantially below the $10000/sf it got to before the crisis.

In HK top "LUxury" is about 30000-40000/sf, with some absoulte exceptions getting to as high as $80000/sf.

Such is the talk about Macau far Lagging HK, because it is about 20% the price in HK.

Take your pick, go to HK and Macau have a feel and decide for yourself.

Good Luck

Most foreigners in Macau tend to invest it the top "Luxury" sector. It Macau, the top price is probably 6000-7000/sf, which got to as low as 4000-5000/sf during the crisis, but still substantially below the $10000/sf it got to before the crisis.

In HK top "LUxury" is about 30000-40000/sf, with some absoulte exceptions getting to as high as $80000/sf.

Such is the talk about Macau far Lagging HK, because it is about 20% the price in HK.

Take your pick, go to HK and Macau have a feel and decide for yourself.

Good Luck

Thanks for the info! Really helps a lot ;)

I received today call fro m an agent informing about new building called A12 or "wu pun meng mum" located at Nam Van lakes, in front of the old Hotel Lisboa and close to the Emperor hotel. Prices shall range from HKD4000 to HKD6000 psf. But design seems odd and there are 17 (!!!!!!) units per floor, ranging from 1200 to 2500 sf. I heard that the building was originally designed to be a casino/hotel

Yes, that building is on the other side of the Nam Van Lakes -- you can see the building very well from One Central. It has a great location too. I am not sure of what the pricing will look like, probably the range you are talking about. I think it may be launching in the next day or two for inside sell. I am eager to see what their units would be selling for when they launch.

The design does give one the feeling that it was intially designed as a hotle, ie rooms (apartments) on either side of the corridor. My understanding is the range is correct at $4000-6000/sf. But I feel the building is far inferior to One Central.

After the government has intervene with the China and Hong Kong real estate market, what do you guys think will happen to the real estate market in Macau? Especially One Central? Has anyone hear anything about new policies that Macau government may implement?

I wanna be come to casinos here :lol:

Agent told me today that next big residential project (after One Oasis, 12 towers) will be located in Taipa, beside One Grentai, facing the Macau University of Science and Technology/airport. Total of 26 towers, apartments ranging from 600 to 2800sqf. Sales of entire floors will start probably in July. No price list yet

This is "old" project put on hold due to shenanigans.
It's a wall of residential blocks covering the Taipa Grande hill.
Shame.

http://www.chineseestates.com/eng/PropDetails/65/97/951.aspx
.

where to build up the estate?