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Property News Weekly Digest
〈Asian Post, February 10, 2018〉Global paint and coatings company AkzoNobel says it expects its business growth in the Chinese market to 'maintain the current momentum' in the coming years, despite concerns that tightening housing policy could deal a blow to the industry.

China is one of the most important markets for the Netherlands-based company, says Lin Liangqi, president of AkzoNobel China.China accounts for approximately 12 percent of AkzoNobel's total revenue each year, he says.

'We are benefiting from China's economic growth. In the past 10 years, we have been growing at double-digit rates,' he says, without giving a specific figure.

Lin acknowledges that the cooling down of China's real estate market in the wake of tightening government policy could negatively affect the company's business, but says he believes there is still plenty of space to explore in the country.The major impact that policy regulation will have is on the new-home market, he says.

'But China is such a big country in the repainting sector. Most buildings have not been repainted for more than 10 years ... We still see a lot of potential for China in that area,' Lin says.

'We are not worried about the cooling down of real estate. If real estate continues (to develop), we will still benefit from it.'

The Chinese market generated 1.77 billion euros ($2.20 billion) in revenue for AkzoNobel in 2016, down by 3.3 percent from 1.83 billion euros a year earlier, according to the company's annual report.

AkzoNobel now operates in around 80 countries with 46,000 employees worldwide. Its China-based staff makes up 15 percent of the total.

The chemicals company owns a number of well-known brands, including Dulux, Sikkens, International, Interpon and Eka. It is the coatings supplier for many famous buildings in China, including Hong Kong's IFC and the Hong Kong-Zhuhai-Macao Bridge.

〈The Standard, February 9, 2018〉Mainland property management services provider A-Living Services priced its shares at the middle of the offer price range, and saw its retail tranche oversubscribed 19 times.

The final offer price is HK$12.3, and the company, which is the real estate management services unit of Chinese property provider Agile Group Holdings (3383), raised net proceeds of HK$3.9 billion from the public offering.

It will use about HK$2.5 billion for strategic investment and acquisitions, around HK$392 million will be used to further develop its one-stop service platform. It will debut today.

Shares in the gray market yesterday declined 11.7 percent. Meanwhile, Dragon Rise Group Holdings (6829) closed only 3.75 percent higher on its debut, despite surging over 20 percent in morning trading.

Shares closed at 41.5 HK cents, compared to the offer price of 40 HK cents. Investors will earn f HK$150 on one board lot of 10,000 shares.

Hong Kong actress Candice Yu On On attended the listing ceremony yesterday to support Dragon Rise, saying she planned to subscribe to the company's shares,but it was very difficult to get one board lot, as the construction firm's retail tranche was oversubscribed 1,680 times. Elsewhere, mainland China's Jiangxi Bank may speed up its Hong Kong IPO plan, according to mainland media. It said the bank is expected to file the listing application to the SAR bourse this year.

〈Ming Pao, February 8, 2018〉With respect to the disputes surrounding the use of the Fanling golf course, the government put off tackling the problem for a long time. It has finally submitted two proposals listed in a commissioned study to the Task Force on Land Supply — a partial development plan and a full development plan. The government's private recreational land lease policy is excessively biased towards meeting the needs of the middle and upper classes. Times have changed. Citizens no longer accept such a way. It certainly goes against the popular sentiment to insist that the whole Fanling golf course be preserved.

The plans proposed in the commissioned study may be a basis for concrete discussion in the public consultation to be held. However, there is a certain gap between the estimation in the study of the number of residential flats that can be built and other views, and all may not be happy with the greening layout. Citizens have reason to believe there can be a plan C that is better. The plans suggested in the commissioned study should not be allowed to limit the discussions or options of the use of the golf course.

The Fanling golf course (run by the Hong Kong Golf Club) covers about 170 hectares of land. The lease of the golf course expires in 2020. Land is in extremely short supply in Hong Kong. It is often said that the Fanling golf course "covers a vast stretch of land but serves only a few". It has become what epitomises deep-rooted social contradictions.

The commissioned study the government has submitted lists two options. One is that the golf course should be partially developed — that 32 hectares of its land be taken out for putting up 4,600 flats (housing 13,000 people) and the remaining 140 hectares be preserved for international golf tournaments. The other is that all the land of the golf course should be taken back for redevelopment and on it 13,200 flats should be built to house 37,000 people.

〈Asian Post, February 7, 2018〉The Swire Group has named a sixth-generation descendant of its 19th-century founder to chair its Asian holding unit and property subsidiary, putting a family member at the head of Swire Pacific for the first time since it was listed in 1974.

Group chief executive Merlin Bingham Swire, 44, will take over as chairman of Swire Pacific and Swire Properties on July 1, according to a company statement.

John Slosar, Swire Pacific's chairman since 2014, will retire, although he will remain chairman of Cathay Pacific Airways.

The reshuffle marks the first time a family member will chair one of Asia's largest conglomerates, with a HK$106 billion business owning stakes in companies covering almost every aspect of Hong Kong life, from the bottling of beverages and sugar refining, to developing commercial and residential property, to operating the city's dominant airlines.

It comes as Swire Pacific and Swire Properties struggle to crawl out of their lowest profit levels in a decade. Both companies are expected to announce their full year and second-half financial results on March 15.

Swire Pacific's 2016 net income fell 28 per cent to HK$9.64 billion, the lowest since 2008. At Swire Properties, which builds offices and manages shopping centres, 2016 net income was unchanged at HK$7.11 billion, while revenue rose 2 per cent to HK$16.79 billion.

〈The Standard, February 6, 2018〉A survey conducted by Citibank has showed that 63 percent of Hongkongers believed that home prices would rise further, but 20 percent would still buy flats in the city even if prices were among the most expensive in the world.

A separate survey by CBRE showed that living in Hong Kong remains the most expensive among 29 key global cities. The average price of an apartment in Hong Kong is US$1.16 million (HK$9.05 million) or US$1,616 per square foot, according to CBRE. Singapore and Shanghai ranked second and third, respectively.

Shih Wing-ching, chairman of Centaline Property Agency, predicted Hong Kong's home prices to increase by between 8 percent and 10 percent this year at the Master Insight Forum.

He also said that the rate of return from investments in office premises will be higher than that in luxury residential properties.

Shih said the bubble in the mainland property market is more serious than in Hong Kong, adding there are no signs as yet of any potential bubble burst in the local market.

Three factors can be used to measure the bubble in the local market, he said. The first is excessive construction, but there is no such phenomenon in Hong Kong. The second is excessive borrowing, but debt repayment in Hong Kong is healthy at over 60 percent. The last factor is when people's purchasing power is dissociated from property prices. However, high-income earners in Hong Kong still have ample purchasing power and they can absorb rises in prices which means the situation in the local housing market is not very serious, Shih said.

Meanwhile, Credit Suisse Asia Pacific managing director Tao Dong said Hong Kong's property market would track its mainland counterpart as the former moves synchronously with the latter.