Infrastructure will drive the West Kowloon Industrial and Commercial Building to catch up
The investment sentiment has turned prudent. DTZ has predicted that West Kowloon will be driven by infrastructure. In addition, the population of Tseung Kwan O District continues to grow and the value of investment in shops is high.
In the second half of the year, the investment sentiment weakened and the market was less likely to record big deals. In the past two years, the focus of investment in Jiaxiacheng has been lack of index trading in recent months. The core area is buying and selling. It is a Chinese-funded institution that purchases the entire floor of the 49th floor of the Central Center, with an area of about 25,695 square feet and a price of about 43,500 yuan.
Zhu Deshan, executive director of DTZ, believes that with the decrease in the rate of return, the sales of the core area will inevitably decrease. “The company’s two-year trading has been prosperous for two consecutive years. Investors are chasing goods into the market, and the rate of return is not their main consideration. But the current property market is turning quiet. Investors pay more attention to the rate of return. However, the core area of the Jiaxia unit is only 2% or less, which is not enough to offset the cost of entering the market, so it will be turned into prudence. At the same time, the core area of the company is strong in charge, only a slight price reduction. The sale, the formation of buying and selling saws."
The supply of the Dongjiu Commercial Building is difficult to rise.
As for the non-core area, the East Kowloon business district has matured in recent years. She said that the price of commercial buildings in the district is still stable. However, due to the high supply, the rental price is unlikely to increase significantly. In contrast, she is optimistic about the West Kowloon District, which is driven by the infrastructure. “The high-speed rail and the Hong Kong-Zhuhai-Macau Bridge have been opened to traffic, which will drive the commercial atmosphere of Tsim Sha Tsui, Cheung Sha Wan and Kwai Estate. The West Kowloon price is relatively low and it can be pursued." She thinks that apart from commercial buildings, the industrial market in West Kowloon is also worthy of attention. “The revitalisation of the industrial building will facilitate the revitalisation of the industrial building and the redevelopment of the new policy will be able to relax the plot. Compared with the value of investment in industrial buildings."
In the second half of the year, the investment market was relatively quiet, and the Minsheng District shopping malls became the focus. Recently, the largest purchases and sales were launched for the exhibition (00823). The 12 shopping malls included Sha Tin Qin Shi Shopping Mall, Cheung Sha Wan Happiness Shopping Centre and Tuen Mun Mountain Shopping Centre. They were sold for a total of $12.10 billion. The transaction price was September 30. The valuation is about 32.1% higher. The buyer is a consortium led by Gem Capital, including Goldman Sachs. They purchased 12 shopping malls, together with about 4,700 parking spaces, totaling 1.1 million square feet of shopping malls. Last year, the consortium invested 17 billion yuan in the exhibition, and re-entered the market one year later.
Zhu Baoshan believes that the value of investment in regional shopping malls is high. Due to the large basic demand, “the population continues to grow, the consumption of people’s livelihood in the region will never decrease, and the rental income of shopping malls will stabilize and suit institutional investors."
Tseung Kwan O’s middle-income increase in retail prospects
In terms of zoning, she is looking forward to the prospects of Tseung Kwan O. In fact, in the fourth quarter, the district recorded large-scale shopping mall transactions. Wheelock (00020) sold its Ao Nan shopping mall portfolio including Capri Place, Savannah Place and Monterey Place, covering the total floor. The area is about 300,000 square feet and the buyer is Fengtai Real Estate. Zhu Baoshan pointed out that the prospects for Tseung Kwan O are very good. “The southern part of Tseung Kwan O is a coastal area. It is a combination of high-end residential, commercial, retail, hotel, education and entertainment. There will be government office buildings and key government infrastructure projects, including Tseung Kwan O. Lantian Tunnel and Cross Bay Bridge. In addition, there are sufficient sports facilities in the district, such as bicycle parks.
She believes that population growth provides the most basic consumer group for regional shopping malls. “The population of Tseung Kwan O will increase from 470,000 to 534,000. The new market in the region, such as the Tianjin and Ao Nang projects, is very good. In other words, the number of middle-class families in the region. The increase, coupled with the availability of international schools in the district, is sufficient for the retail population to support retail properties."