1) Hong Kong GDP growth of 1% in Q2 beats forecasts
Hong Kong’s economic growth exceeded forecasts in the second quarter, driven by rising exports, which lead to an upward revision of its full-year growth forecast. Official figures show that the economy accelerated 1% in the second quarter of the year compared to Q1, up from 0.7% growth in the first quarter 2017 QOQ. Analysts had expected a slight slowdown to 0.6% in Q2. This resulted in a GDP growth of 3.8% YOY for H1 2017, which is above the forecast rate of 3.3%, representing a moderation from 4.3% YOY registered in Q1 this year. The first quarter growth rate was Hong Kong’s best since 2011. The robust quarterly performance prompted Hong Kong’s statistics office to revise its full-year GDP forecast from 2-3% to 3-4% in 2017. (Source: Financial Times, 11 August 2017)
Hong Kong’s economic growth gained momentum with a strong outlook for exports and domestic demand. The cyclical recovery in global trade should continue to support Hong Kong’s exports in H2. However, the growth rate may ease as Chinese import demand will moderate given the RMB’s appreciation of nearly 5% this year so far. Domestically, investment momentum should remain solid and the growth of private consumption should stay steady, supporting growth in H2. The revised GDP forecast is positive for Hong Kong’s occupier market and will support rental growth across all property sectors in H2 2017.
2) 28 developers express interest in a Central office, hotel and retail development site
The Urban Renewal Authority (URA) has drawn stronger-than-expected initial response from potential bidders for its office-retail-hotel redevelopment project near Soho in Central Hong Kong, which could be worth more than HKD10 billion (USD1.28 billion). 28 developers submitted expressions of interest for the plot, named “Site C”, bounded by Graham, Gage, and Cochrane Street, when it closed last Friday. Logan Property and China Overseas, both listed in Hong Kong, were named as the mainland-based developers believed to have submitted expressions of interest (EOI) for the project, according to Chinese media reports. (Source: SCMP, 11 August 2017)
Stronger competition in the residential land market together with a positive outlook for the commercial property market has attracted developers to bid for commercial development sites. The residential land market has proven to be very competitive this year so far, including the most recent sale of a site in Whitehead, Ma On Shan, which attracted 30 bidders. Developers submitted more aggressive bids amid strong competition from participating Mainland Chinese companies. On the other hand, given limited supply in the CBD, developers are confident that Central will remain the largest commercial cluster in the long run despite an accelerating decentralisation trend and the rise of CBD2 in Kowloon East.
3) Yuen Long South development plan announced
The Planning Department and the Civil Engineering & Development Department unveiled the Yuen Long South Recommended Outline Development Plan. It was prepared under the Planning & Engineering Study for Housing Sites in Yuen Long South - Investigation. The development proposals comprise the transformation of 100 hectares of brownfield sites into a liveable and green community, providing around 28,500 new flats that can accommodate a population of 88,000 people. The development will be completed in phases, with the first occupation tentatively scheduled for 2027 and the whole development expected to be completed by 2038. The study has adopted a three-stage community engagement and public comments have been taken into account for the plan's preparation. (Source: pland.gov.hk
, 8 August 2017)
Together with the Hung Shui Kiu New Development Area, the two areas will be the largest development area in Northwest New Territories in the long run; planned to provide a total of 41,005 private residential units and to accommodate a total population of 306,000 people in 10 years. The development will be supported by projected new infrastructure including a new road network between the areas and Route 11, connecting North Lantau with Yuen Long. Commanding a strategic location in proximity to the Hong Kong-Shenzhen Western Corridor, the River Trade Terminal and other logistics hubs, the western part of the territory will become an international and regional gateway of Hong Kong. (Source: hsknda.gov.hk