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The implication buying & selling strategy of a smart investor
2022-12-24
The year of 2022 is ending. The property market is not significantly changed. The market observers are still very wary for the future development of the economic environment. Although the pessimistic mood is widespread to the public, Cheung Kong Asset Holding Limited, the pioneer of an investor, made a great decision suddenly to purchase a vast plot residential land in Kai Take, Kowloon. This massive 8.7 billion Hong Kong dollars investment shocked the market and gave the implication for all the investors.
Cheung Kong is highly respected by the investors for its perfect timing to buy or sell of the investment property. In early of 2017, Cheung Kong sold out 75% of undivided shares of The Centre in Central to the consortium for 40.2 billion dollars. This consortium consists of China company and local investors, and they are veterans in handling big property deal. Unfortunately, the latest transaction price of The Centre has already come down from 33,000 to 27,000 dollars per square feet. It is equivalent to twenty percent lower than the original price. Furthermore, the rental of this property has been declining thirty percent since this property changing hands five years ago. Nowadays, the yield return of this property is only about 1,4%. This massive deal was a remarkable achievement for Cheung Kong, and it proved its superb capability to close an investment deal in critical moment.
Keung Kong did another big deal five months ago by selling the whole lot of the  21 Borrett Road, a high-rise luxury apartment complex consisting of 152 residential unit, to a Singaporean consortium by 20.7 billion dollars. Keung Kong showed its deal maker capability again in the declining market. Until now, the opening door policy is coming back to China, but it will not change dramatically the downturn of prestigious house market soon. The heavy indebted listing China property companies are still suspending for trading in Hong Kong Stock Exchange. The wealthy Chinese investors have suffered tremulously losses in the past three years. The sources of big spenders have been depleted. On the other hand, local wealthy investors are also cautious and seem not much interesting to invest in the luxury house market. Cheung Kong understood this realistic situation, so the management sold this property in a whole package to an overseas buyer. As a result, the company saved huge resources by selling this property individually and secured the future income in the next two years. If the company sold this premises unit by unit basis, it would not be sold out in the coming five years.
The land which Keung Kong acquired recently is small and medium size residential usage. The accommodation value of per square feet of this plot of land is about six thousand Hong Kong dollars. The basic costing including interests and construction fees of this property development is about four thousand dollars per square feet. The pre-sale price may reach twenty thousand dollars when this premises will be completed three years later. It means that the profit margin is one hundred percent. If this estimation is correct, the present value of the urban residential units is already at the lowest point.
Keung Kong sold the investment offices and luxury house project but brought the small and medium size residential land. It reveals that Keung Kong’s investment preference is general residential market. As a common investor, one should get the implication from the strategy which Keung Kong is being employed.
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1. New platform looking for talents 2022-12-24 12:54:49 |
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Hong Kong introduced an online platform for overseas talents to apply to come to the city on Friday, as officials said the platform will commence services starting next Wednesday (Dec 28) with the vetting process completed in four weeks the soonest. In an afternoon press conference, Secretary for Labor and Welfare Chris Sun Yuk-han said the online platform running from next Wednesday onwards will accept applications globally and talents can submit their applications or pay necessary fees online. A physical office will be set up soon and the vetting process is expected to be completed by the government in four weeks after collecting all necessary documents, Sun said. |
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2. 觀塘年運工厦強拍 2022-12-25 10:44:04 |
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伯恩光學總裁楊建文或相關人士持有大部分業權的觀塘巧明街119至121號年運工業大廈，周五（23日）獲土地審裁處批准強拍，底價為11.28億元。據了解，楊建文在2020年3月申請強拍時，持有97.7%業權，最新僅餘1個車位及1個單位未能收購。 |
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5. HK GDP increased 0.3%in third quarter 2022-12-26 21:06:43 |
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Hong Kong’s gross national income increased by 0.3% in the third quarter of 2022 to $792.7b, according to recent government data. The Gross Domestic Product (GDP), estimated at $729.8b at current market prices in the same quarter, recorded a 0.2% decrease compared to a year earlier. The value of GNI was larger than GDP by $62.8b in the third quarter of 2022, which was equivalent to 8.6% of GDP in that quarter, mainly attributable to a net inflow of investment income. After netting out the effect of price changes over the same period, Hong Kong's GNI decreased by 2.6% in real terms in the third quarter of 2022 from a year earlier. The corresponding GDP in the same quarter decreased by 4.5% in real terms. |
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6. China remove quarantine requirement 2022-12-27 08:29:54 |
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China will remove quarantine requirement for inbound travellers from January 8 as the country dismantles the remnants of a zero-Covid regime that closed it off from the rest of the world for almost three years. The National Health Commission yesterday unveiled the move as part of a wider announcement that downgraded the country’s management of Covid-19 and definitively abandoned a host of other preventive measures. The NHC said that more than 90 per cent of cases of the omicron variant were “mild or asymptomatic”, part of a shift in tone towards coronavirus as it rages across a country where until recently very few of the 1.4bn population had contracted it. |
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7. 夠膽低位撈底真高手 2022-12-28 13:21:36 |
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年以125.9億元購入「啟德地王」第4C區2號，平均樓面地價為19,636元，成為一時佳話；但三年後的今日，長實上週以僅三分之一的價錢，即每方呎6,138元中標啟德地皮，從回2014年毗鄰地皮水平，引起市場譁然。雖然新單位應市需時，但最新樓面成本比高位低三分之二，令同區發展商和業主心理上即時「坐艇」無異，值得注意是長實是六個入標財團中的最高出價，可見其他發展商出價更低，對後市更保守。 |
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8. Sotheby's exhibition area in Central 2022-12-29 12:41:19 |
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Sotheby's will open a state-of-the-art exhibition space in Landmark Chater, part ofHonhkong Land''Central portfolio. Its space will take up nearly 24,000 sq ft in the luxury retail destination on a long-term lease, starting in 2023. It is set to open in two years. The space will feature an exhibition area for auctions and private sales, an area for instant purchases and a food and beverage concept. It will also host a museum of collectibles open to the public. Sotheby's will be the first Hong Kong auction house to move its galleries from an office to a retail space. |
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9. Commercial market is still under pressure 2022-12-30 16:08:29 |
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With China easing its COVID-19 rules and travel restrictions in December and the recent stock market rebound, retailers are anticipating the opening of the borders between Hong Kong and China that could lend some support to the declining commercial real estate market, a report by CBRE reveals. However, the analyst warns that interest rate hikes will still continue to weigh heavily on investment markets. This means the commercial real estate market is expected to receive a low volume of investments. In CBRE’s report, investors are offloading their assets to pile up capital. This is seen as investors trying to wait for better deals and other opportunities before re-entering the market. Meanwhile, some asset owners who are facing some financial difficulties have actively disposed of their commercial assets like the recent sale of Stan Group/Tang family selling of a 12,030 sq. ft. strata unit at Vigor Industrial Building, Tsing Yi for $74m. |
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