From luxury Singapore apartments to Malaysian seafront condos, Hong Kong investors are shifting cash into Southeast Asian property, demoralized by pro-democracy protests in the territory and US-China trade issues.
Property stocks in one of the world’s most expensive housing markets have plummeted since June, with developers being forced to offer discounts on new projects and cutting office rent.
Hong Kong businessman Peter Ng bought a condominium on the Malaysian island of Penang — which has a substantial ethnic Chinese population and is popular among Hong Kongers — after the protests began.
“The instability was a catalyst for me,” the 48-year-old stock market and property investor told reporters, adding that he was worried about long-term damage to the Hong Kong economy if the unrest persists.
“Investors will always look at things like that, political stability,” he said.
Derek Lee, a Hong Kong businessman who owns an apartment in Penang, said that he knew others in the Chinese territory who were considering investing in Southeast Asian property because of the unrest.
“People are thinking about how to quicken their ideas, how to make a more stable life,” the 55-year-old told reporters.
Adding to the allure of Malaysia is its relative affordability and prices much lower than Hong Kong.
The Malaysia site of Southeast Asian real-estate platform Property Guru has seen a 35 percent increase in visits from Hong Kong, Property Guru chief executive officer Hari Krishnan said.
While Hong Kong’s protests are primarily pushing for greater democratic freedoms and police accountability, they have been fueled by years of simmering anger toward Beijing and the Hong Kong government over falling living standards and the high costs of living.
Hong Kong’s property market is one of least affordable in the world, with sky-high prices fueled, in part, by wealthy mainlanders snapping up investments in a city that has for years failed to build enough homes to meet demand.
However, mainland Chinese, who traditionally viewed property in Hong Kong as a safe investment, are now opting for rival financial hub Singapore as a result of the protests and the US-China trade dispute, according to observers.
There has been a jump this year in sales of luxury apartments in the city-state — which like Hong Kong is known for pricey property — driven partially by mainland Chinese buyers, consultancy OrangeTee & Tie said.
“The protests in Hong Kong have made some of the [mainland Chinese] based there ... [more concerned] about investing in Hong Kong real estate, so they carry that investment to Singapore,” said Alan Cheong (張國榮), executive director of the research and consultancy team at Savills Singapore Pte Ltd.
As well as hitting China’s economy, trade tensions might have discouraged some Chinese from investing in the West and pushed them toward Singapore, with its mostly ethnic Chinese population.
“I think they don’t want to go to the West,” Cheong said.
Singapore is “the closest country culturally to China other than Hong Kong, and I think they feel more comfortable with that,” he said.
There are further signs the stable, tightly ruled city is benefiting from the Hong Kong turmoil — Goldman Sachs Group Inc last week estimated that as much as US$4 billion flowed out of Hong Kong to Singapore this summer.
Analysts warned that there was little hope of Hong Kong’s property market recovering soon.
“Hong Kong property share prices have corrected by about 15 to 25 percent since July,” said Raymond Cheng (鄭懷武), head of Hong Kong and China property at CGS-CIMB Securities International Pte Ltd (銀河-聯昌證券).
Residential sales were still holding up, but only when developers offered discounts, office rents were expected to fall by as much as 5 percent and shop rents were also badly affected, he said.
BULK PURCHASE: The French chain and Hong Kong-based Dairy Farm International reached a deal covering 224 stores, which is expected to be finalized by year’s end Carrefour SA yesterday announced it would acquire Wellcome Taiwan Co (惠康百貨) for 97 million euros (US$108.33 million), and bring all the Wellcome supermarkets (頂好超市) and Jasons Market Place stores nationwide under its banner within 12 months of the deal closing. The France-based hypermarket chain reached an agreement with Hong Kong-based Dairy Farm International Holdings (牛奶國際控股), the pan-Asian retailer that launched Wellcome Taiwan in 1987. The transaction involves 199 Wellcome supermarkets, which have average sales areas of 420m2 and 25 high-end Jasons Market Place stores, which have an average sales area of 820m2, as well as a warehouse in Taoyuan, Carrefour Taiwan (家樂福)
‘ONE-STOP SHOP’: A Miaoli official said that the factory in the Jhunan section of the Hsinchu Science Park would create more than 1,000 jobs and boost prosperity A new high-end IC packaging and testing plant planned by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in Miaoli County is expected to start operations in the middle of next year, Miaoli County Commissioner Hsu Yao-chang (徐耀昌) said. Hsu wrote on Facebook that TSMC, the world’s largest pure wafer foundry operator, would invest NT$303.2 billion (US$10.1 billion) to build the plant, the largest-ever single investment in Taiwan. However, TSMC declined to disclose the financial terms of the deal, while a company board meeting on May 12 approved a spending plan worth NT$168.2 billion as part of its investment plans. Construction of the
SCATTERED: Production would be dispersed among a number of countries, which would bring an end to so-called world factories, Hon Hai chairman Young Liu said Decentralized production would be the new focus in manufacturing, Hon Hai Precision Industry Co (鴻海精密) chairman Young Liu (劉揚偉) yesterday told an online forum held by the Market Intelligence & Consulting Institute (MIC, 產業情報研究所). “The COVID-19 pandemic exerted a heavy impact on supply chains as well as production ... [production] would no longer be concentrated in solely one country, this is the end of what we used to call world factories,” Liu said during a panel discussion hosted by MIC director Victor Tsan (詹文男). As the US and China continue to dominate and sway international relations, the rest of the world is
PLANNED OUT: The government is lifting sale and export restrictions on 60% of the 20 million masks made daily, but people can still make purchases using their NHI cards Twenty thousand boxes of 50 masks each would be on sale at FamilyMart convenience stores starting tomorrow, Taiwan FamilyMart Co Ltd (全家便利商店) said yesterday. A box of 50 masks would cost NT$249 for those with FamilyMart memberships and NT$299 for those without, with no limits placed on how many boxes a person can buy, the company said. Convenience store chain operator Hi-Life International Co Ltd (萊爾富) said that it would also start selling masks from tomorrow. It has yet to announce details about prices and quantity. Hypermarket chain operator Carrefour Taiwan (家樂福) said that it would start selling packs of five