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Friday, 25 May 2012
Tuesday, 22 May 2012
Thursday, 17 May 2012
Luxury Asian Property Prices Continue to Increase
Average high end residential property prices in eight key markets in the region Asia Pacific rose by 1% in the first quarter of 2012 compared with the last three months of 2011, according to the latest index from Jones Lang LaSalle.
Hong Kong, Bangkok, Kuala Lumpur and Jakarta showed increases in the first quarter, Beijing, Shanghai and Singapore showed declines whilst Mumbai was stable.
Jakarta was up 4.3% in the first quarter of this year and in the twelve months to the end of March 2012, delivered the strongest price performance among the monitored markets, with growth of about 16%.
After declining over the past six months, luxury residential prices in Hong Kong showed initial signs of stabilizing, up 1.4% quarter on quarter, largely due to low interest rates and more active mortgage lending by banks.
Average prices in Singapore’s luxury prime market declined by 2% quarter on quarter after remaining stable for six consecutive quarters on the back of on going rental adjustment.
Capital values for luxury apartments in Shanghai fell by 1.2% quarter on quarter, while average prices in Beijing fell by 2.3% as tightening policies remain in place and sales volumes are down in the China Tier I markets.
Kuala Lumpur saw high end capital values up by 6.9% in the first quarter due to some additions to its stock. Capital values would have been largely stable ignoring the change to stock.
‘The first quarter increase is a continuation of a trend we have witnessed over the last 18 to 24 months in the Indonesian residential market, where price increases have been consistently pushed through by developers on the strength of robust demand levels,’ said Todd Lauchlan, country head for Jones Lang LaSalle Indonesia.
‘Demand is being driven by significantly increased affordability, and with record low interest rates, high consumer confidence levels and strong income growth we expect to continue to witness the rise of the Indonesian middle class,’ he added.
Luxury residential prices in Hong Kong showed initial signs of stabilising after declining over the past six months, while growth in some emerging South East Asian markets helped to offset price declines in Singapore and China. The sales markets showed mixed performance, with slightly more buoyant activity in Hong Kong and Singapore late in the first quarter, while China continued to record fewer launches and sales.
Looking ahead, Jane Murray, head of research for Asia Pacific, said that prices in China are expected to decline further over the next 12 months, as policy restrictions are likely to remain in place and developers are likely to introduce more price discounts.
She said that prices in Hong Kong and Singapore are also expected to decline over 2012, as a result of projected rental correction, generally weaker investor sentiment as well as policy risks.
‘That said, the extent of price correction in Hong Kong will likely be limited by the tight supply situation. Among emerging South East Asian markets, the Jakarta sales market should see the strongest price growth on the back of a strong economy while prices in Kuala Lumpur and Bangkok should be largely stable,’ she explained.
Tuesday, 15 May 2012
Frank Gehry Unveils The Super Luxury Opus on the Peak.
A Celebrated Architect’s Hong Kong Rental Building Helps Define ‘Superluxury’
HONG KONG — The Hong Kong skyline is like a roll call of celebrity architects: There are the Bank of China by I.M. Pei, the HSBC building by Norman Foster and the International Finance Center by César Pelli. But in a city whose twin obsessions seem to be property and luxury brand names, there has never been a “starchitect”-designed residence until now.
Last week, Swire Properties unveiled to the public Frank Gehry’s Opus Hong Kong — the first major project in Asia for Mr. Gehry, a winner of the Pritzker Prize, an annual award for a body of work in architecture.
Opus is reaching the market as doubts swirl about Hong Kong property. In interviews, analysts and agents predicted a decline of 10 percent to 15 percent in residential prices this year. The local media have reported that Hong Kong’s new chief executive, who will take office in July, may alter land policy to loosen the grip of major developers, which could drive prices down.
Still, analysts put what they call “superluxury” properties in a category of their own. Worries about the rest of the market do not seem to have damped Swire’s enthusiasm for what it is describing as potentially the most expensive apartments in the city.
The company’s marketing blitz began two years ago, when it flew Mr. Gehry, now 83, to Beijing for a retrospective that spotlighted his masterpieces like the Guggenheim Museum in Bilbao, Spain, before concluding with a sales pitch for Opus.
In March, Mr. Gehry was in Hong Kong as the final touches were put on the project. A dozen publicists ran around, ushering television crews in and out. Mr. Gehry looked out a curvy floor-to-ceiling window at an expanse of green in the upscale Peak neighborhood, drinking black coffee and ignoring the hubbub around him.
“Your quote will have to wait,” he said to one of the many journalists, “until I finish this piece of chocolate.”
Hong Kong property is among the world’s most expensive, partly because the government controls land supply, and there is precious little buildable land left. It is a city where high-rises hold as many tiny homes as possible, where even ordinary new offerings of property for sale result in huge lines and where the police stop overly aggressive real estate agents from harassing passers-by. Against this backdrop of frantic buying and selling, Opus is something of an anomaly: a relatively small superluxury development that Swire expects to hold onto itself.
Compared with Mr. Gehry’s more experimental works, Opus is tame in terms of design. It is essentially a glass cylinder with gentle curves, as opposed to the explosion of flaps, sails and ripples seen elsewhere.
The twisted support beams are on the exterior, leaving the vast interiors column-free. Seen from above, it is shaped like a flower, with the curved windows and balconies of the “petals” offering views that would be impossible with a more conventional construction.
“The level of iconicity depends on the appropriateness of it,” Mr. Gehry said of the building’s relatively quiet design. “This site on the Peak allows for a very dynamic, sculptured piece. The best thing is to be respectful, and not to pre-empt the neighborhood.”
The project stands out for two reasons. First, the 12-story building has only 12 units: two duplexes with private gardens and pools on the ground floor, and 10 apartments above, each taking up a whole floor and each with its own design. Apartments range from 6,000 to 6,900 square feet, palatial by Hong Kong standards.
Second, though the development is hardly modest in price, it is modest in scale because of Opus’s particular circumstances. It could be built only because the Swire Group — a conglomerate, controlled by a British family, whose origins date to the 19th century China coast trade — released a plot that had been held privately since the 1940s and had previously been used for a company director’s home. That home was razed. Swire had to apply for special government permission and could build only to a certain height.
“We couldn’t do the horrible chopsticks,” Martin Cubbon, Swire Properties’ chief executive, said in an interview, referring to the towering spires typical of the cityscape. “We recognized that we were doing something special.”
Swire is aiming at high-end tenants by dividing the building into a small number of large apartments. Typically, a developer in Hong Kong would use that same space to create as many as 50 to 100 apartments, starting at 600 square feet, which is closer to the size of an average Hong Kong home.
Opus is also different because Swire intends to rent, not to sell. “The family want to retain ownership,” Mr. Cubbon said of Swire’s ultimate owners. “They are not interested in selling unless there’s an exceptional offer.”
Anthony Hindmarsh, director of Qi Homes, a boutique real estate agency in Hong Kong, said that high-end apartment owners were increasingly holding onto their property.
“A lot of owners don’t want to sell cheap or at all. They don’t know where else to invest, with the stock market so unsteady,” he said. “They don’t need to sell, especially unique properties.”
According to a report by Savills, the global real estate company, Hong Kong property costs rose steeply from December 2008 to June 2011: Average home prices increased 87 percent during that time, while luxury properties rose 188 percent.
Hong Kong residential real estate is divided into four broad categories: public housing, mass-market units, luxury apartments and superluxury. Analysts set superluxury apart as a category that is all but immune to the usual market fluctuations and other factors, like mortgage policy.
According to Centaline, a property agency in Hong Kong, prices of secondary private residential properties are near their highest levels since 1997, the year Hong Kong was handed from British to Chinese rule. While most analysts and agents are predicting a correction in general housing prices this year, they are more sanguine about the very top end.
“In the superluxury market, it’s not just about the price,” said Vincent Cheung, Cushman & Wakefield’s national director for greater China. “On these properties, the price will not go down.”
According to “Wealth Report 2012,” released in late March by Knight Frank and Citi Private Bank, Hong Kong luxury property prices grew about 60 percent over the last five years, making them among the fastest-growing in the world.
“There is still a shortage of properties,” said Thomas Lam, head of research for greater China at Knight Frank.
He called superluxury “a totally separate market” and added, “It’s not about income. It’s about lifestyle.”
“Per square foot, it will be among the most expensive in Hong Kong,” Mr. Cubbon of Swire said about Opus. “These will be among the highest rents in Hong Kong, quite possibly among the most expensive in the world, except for very special individual properties, like a penthouse at Hyde Park” in London.
Swire has not released potential rental prices for Opus. Listings of nearby buildings and estimates by analysts, however, put top-end rents on the Peak at 60 to 90 Hong Kong dollars, or $7.70 to $11.60, per square foot a month. The monthly rent for a 6,000-square-foot flat like one at Opus would work out to 360,000 to 540,000 Hong Kong dollars, or about $46,000 to $69,000.
While expensive projects in Asia, and particularly China, continue to lure many Western architects, Mr. Gehry has done nothing in the region before Opus, except for what he called “a little restaurant in Kobe,” in Japan.
Now, however, he is one of three finalists competing to design the National Art Museum of China. “I heard that it’s hard in Beijing to get close to the client,” he said. “You’re just blind.
“But I love the idea of a culture that is aggressively building new worlds and sustainable cities,” he added. “An old guy like me finds that interesting, and I want to help them. I’d like to be involved in their new cities. I could be valuable to them.”
Tuesday, 8 May 2012
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