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Centaline Macau: 2016 Q4 transactions for commercial property surged

Local real estate agent reports transactions in the fourth quarter of 2016 for commercial property reached two-year high

Hong-Kong based real estate agency Centaline (Macau) Property Agency Ltd. reported yesterday in a press conference that last year’s fourth quarter transactions for commercial properties had reached a two-year high, with last December’s transactions alone reaching MOP2.6 billion (US$230 million).
Centaline Macau Director Roy Ho Siu Hang explained that the significant rise had resulted from improved confidence in the market by big enterprises.
He cited Statistics and Census Bureau (DSEC) data and estimated that some 120 commercial properties would be transacted in the first three months of this year, generating in excess of MOP2 billion.
In terms of street store rentals, Mr. Ho perceived that the market would rebound in the second half of the year.
Positive performance is also anticipated by the real estate agent for office units, given that the agent had recorded transactions for more than 20 office units, amounting to over MOP200 million earlier this year.
Referencing official DSEC data, Centaline anticipates over 60 office unit transactions for the first quarter of 2017, which would generate over MOP600 million.
“According to our estimates, a one-fold increase would be expected when compared to the same period last year,” said Mr. Ho.
Regarding the prices of the office units, Centaline recorded growing patterns for regions in NAPE and Nam Van, up three to 10 per cent year-on-year.
Although an upward trend is evident for the prices of office units during the first three months, prices in the leasing market remain unchanged.
Ho cited the decrease in numbers of new companies being established causing stagnant leasing prices for offices.
Nevertheless, Centaline expressed a positive outlook for the office units market in the coming second quarter.
“Owing to the active market response in neighbouring regions and also [because] many enterprises will make purchases during the current low prices […] we expect a growth of some 15 per cent by the end of this year,” said the realtor.

Residential transactions down in Q1, to rebound in Q2
Jacky Shek Po Tak, Senior Director of Centaline Macau, disclosed yesterday that housing transactions – for both new and secondhand properties – for the first quarter of this year had decreased by 40 per cent quarter-on-quarter.
The drop in the first three months, according to the realtor, had resulted from the weak consumption power of some potential buyers.
Mr. Shek explained that dwindling consumption power was caused by the booming housing transactions of the last quarter of 2016.
Citing Financial Service Bureau (DSF) figures, the realtor expected approximately 900 housing transactions to be made in March and some 2,100 transactions for the entire first quarter of this year.
In addition, prices for residential units would generally stand at MOP90,000 per square metre.
With consumption power requiring time to re-accumulate and also the supply of secondhand properties remaining inactive if market prices persist at the same level, Mr. Shek said transactions would reach 700 to 800 per month.
Mr. Shek remarked that an upward trend will be evident in housing prices for the second quarter, noting that new properties such as Nova City will be rolled out later this year.
“We can see that the price per square metre for new properties is in line with secondhand prices,” said Shek, adding that housing prices would remain moderate.

Rocketing Hengqin property transactions
In 2016, some 5,986 transactions were recorded in the Chinese city of Hengqin – double vis-à-vis 2015, as cited by Centaline from official Zhuhai data.
According to Centaline figures, 30.22 per cent of last year’s transactions involved local buyers.
Mr. Ho reported that 68 units in the R&F Centre, costing MOP240 million, were being transacted with a Hong Kong-based enterprise earlier this year.
Given the permit of one licence entry to Hengqin as well as the strengthening policies made by the Chinese city, the realtor perceived that more investors from the two SARs would be attracted.

Gloomy industrial property market
Of all segments, expectations for industrial property units is the most pessimistic.
“For 2017, our outlook for industrial units remains bleak,” said Mr. Ho, observing that transaction has been declining since 2015, with the total number of transactions in that year amounting to just a quarter of those of 2014.
In addition, the stringent regulations for industrial properties in neighbouring cities have led investors to exercise cautious in this market sector.

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