The Manhattan / Tapia East
The Manhattan is Macao’s first residential development designed and built to truly international standards of luxury. Built on rare freehold land, The Manhattan occupies an ideal location overlooking the Cotai Strip, where The Venetian Macau, City of Dreams, Four Seasons and many other resorts are now under construction.

= = =

Luxury housing comes to Macao
By Sonia Kolesnikov-Jessop International Herald Tribune ... August 24, 2006

Other than a few dozen villas, there are only a handful of residential properties in Macao that would be classified as "luxury" by international standards. But that is expected to change in January with the completion of The Manhattan, a 175-unit development being built by MacauLand Holdings and Citigroup Property Investors.

"We picked this site because it's in a great location, right off the Cotai Strip," explained Benjamin Kao of MacauLand. "Cotai will be Asia's version of the Vegas Strip, so this is a prime location, but the icing on the cake is that we're also just next to Old Taipa Village, which is a charming colonial area full of great restaurants and shops."



The two-tower project is pegged to the region's casino boom and the white-collar workers it is attracting. The expatriate population here already exceeds 10,000 and the real estate agency Jones Lang LaSalle estimates that another 7,000 to 15,000 expatriates could arrive just to fill casino management jobs in the next three years alone.

Kenneth Tsang, head of research for south China at Jones Lang LaSalle, believes this influx of white-collar "casino expatriates" will fuel a strong demand for medium- to high-end residential properties in both the rental and sales markets.

Since sales in The Manhattan's north tower began in late June, about a third of the 85 units have been sold for an average price of 3,200 Hong Kong dollars, or $412, per square foot; the developer expects the overall average price may reach 3,600 Hong Kong dollars per square foot.

Also, The Manhattan is being sold freehold, an unusual status in Macao, where most properties come with just a 25-year leasehold.

The two 37-story towers were designed by Tam and Philip So and Associates of Hong Kong, and were inspired by Art Deco designs in New York. Interiors are being done by Richards Basmajin, the Hong Kong-based design company that has a long list of clients in the area, including the Four Seasons Hotel Hong Kong.

Macao's current housing shortage has pushed rents up an average of 28 percent in the last year, and by more than 50 percent in the high-end segment. For this reason, The Manhattan is attracting a fair share of experienced property investors, mainly from Hong Kong, Kao said.

Brett King, a Hong Kong attorney, bought a 1,720-square- foot unit on a high floor for 3,800 dollars per square foot and has reserved another 2,300-square-foot unit on a mid-level floor at about 3,600 dollars per square foot, both as investment properties.

"With the housing shortage and thousands of expats supposed to be moving in, a buy-to-let property is an easy investment. On top of which, there are no taxes on capital gains and no property taxes for new properties," said King, who is hoping for about a 5 percent rental return.

King, a partner in the law firm of Paul, Hastings, Janofsky & Walker, said, "As a lawyer, I also like the fact that Macao has a pretty decent legal system. I looked at Shanghai and Beijing, but the rules in China change arbitrarily and there's little chance of legal redress if something goes wrong."

While more luxury developments are expected in the coming months, prices are still expected to increase. "If we were to build the same building, breaking ground now, it would cost us 30 percent more for the same quality," said Dan Tagliere, another executive at MacauLand. "Construction costs are going up 20 percent a year because everybody is building."

"There is a massive shortage of labor in Macao, with only 26,000 construction workers, and the Cotai Strip is taking about 15,000 of them," he added. "Wages and land costs are going up fast."

Other than a few dozen villas, there are only a handful of residential properties in Macao that would be classified as "luxury" by international standards. But that is expected to change in January with the completion of The Manhattan, a 175-unit development being built by MacauLand Holdings and Citigroup Property Investors.


...more: http://www.iht.com/articles/2006/08/24/news/remacao.php

Firms chase large space in Manhattan towers project

Zach Coleman ... February 10, 2006

Strategic investors are in talks with MacauLand and Citigroup Property Investors to buy one of two towers in their joint-venture luxury residential project in Taipa.#

The partners plan to begin public sales of apartments in the project, called The Manhattan, in May. Its 169 units are to be ready for occupancy next February.



MacauLand principal Dan Tagliere said he expects prices to start at about 3,000 patacas (HK$2,913) per square foot. He said a number of companies are interested in buying blocks of units in the towers to house staff. The partners plan to retain ownership of a large number of units for leasing.

Two-thirds of the apartments are three-bedroom and the rest have four bedrooms. Unit size ranges from 1,626 square feet to 2,492 sq ft.

Fellow MacauLand principal Benjamin Kao said he expects most units will be occupied by expatriate executives, but added that rising incomes are leading more Macau residents to consider trading up from old, paid-off apartments.

The joint venture partners aim to position The Manhattan as an international-class development. "We want to do for the residential market what Sands did for the gaming market," Kao said.

The Manhattan will feature a 17,000 sq ft clubhouse, shuttle bus service to the city center, air-conditioned elevators and concierge service. Flats will be furnished with high-quality appliances, including wine refrigerators and dual heater/air-conditioners. Buyers will be offered pre-set furniture packages.

British property company Savills will manage The Manhattan, which Kao said will make the towers the first residential buildings in Macau managed by an international company. He believes this will help the development to enforce rules on residents to keep up an upmarket atmosphere at The Manhattan. The project also marks the first Macau investment by Citigroup Property Investors, a unit of US bank Citigroup which invests client and bank funds together in real estate.

Kao and Tagliere declined to say how much the joint venture is investing in the project. Hong Kong-listed Upbest Group said last year that it would spend about HK$95 million to build a 64-unit apartment building on a site across the street from The Manhattan. The company agreed to pay HK$27 million for its site, which at 7,201 sq ft is less than a quarter the size of The Manhattan's.

The joint venture bought The Manhattan site from local company San You Development, which built the high-end Kingsville project next door.

Formosa Group and Global Property Partners, both Hong Kong-based real estate investment funds set up by Tagliere and Kao, originally bought 27 apartments in Kingsville in 2004 for leasing to expats through their company Quadrangle Properties. High returns from that led Tagliere and Kao into their deal with Citigroup and San You to take over the freehold site that had been intended for Kingsville's second phase.

@: http://hk-imail.singtao.com/news_detail.as...;d_str=20060210

SOBERING STATS...

Land, Public Works and Transport Bureau figures show 49 private buildings with 5,964 residential units under construction during the second quarter of the current year while another 99 private building projects are under evaluation and pending for approval.

Those 148 projects, if completed, will provide 26,264 residential units. The majority of these projects are targeting the luxury market, at least by Macau standards, with prices of $2,000 per square foot and up
. . .

buyers of Macau's new luxury apartments fall mainly into four groups.

Management Staff from Abroad
New casinos and hotels under construction in Macau will need at least 100,000 employees. Macau's local manpower supply cannot keep up with the demand, so expatriates, particularly from Hong Kong and China, will likely fill those vacancies

These new expatriate recruits are different from most overseas workers previously in Macau. They're mainly professional, mid-level and management personnel who see long term career potential in Macau, which may have the best combination of living conditions, economic growth and investment opportunity in the Pearl Delta region over the next decade. Instead of paying HK$5,000-HK$6,000 (US$643-US$771) to rent an apartment, they would rather buy one. These expatriates want properties with a clubhouse, good management and other amenities in the HK$1.5 million to HK$3 million price range.

Capital Investment Scheme Entrants
Under Macau's Capital Investment Entrant Scheme, buyers residences costing HK$1 million or more get a Macau ID card instantly. The scheme has attracted wealthy mainlanders who value both the simplified travel with a Macau ID and the investment. This key market segment has put a floor under some real estate prices.

Macau Yuppies
The nouveau riche don't just come from outside. Many Macau residents are seeing their incomes rise in the booming economy. For instance, a youngster working in a casino can earn a monthly salary of HK$15,000. For a HK$2 million 1,000-square foot flat with 90 percent financing over 30 years, the monthly instalment at the current mortgage rate is around HK$10,000. That's one-third of family income for a husband and wife team of baccarat dealers.
Flats at Nova City in Taipa and La Cite in the prime Perola district priced at $2,000 per square foot are sold outfitted with domestic appliances and other fixtures and have good facilities, so buyer would probably get a lifestyle upgrade over a comparable rental. These large housing estates are the first choice for young buyers, the experts say. Jimmy Yeung of Midland Realty Macau warns that these young people might need a year or two to save up for the down payment.

Rich and Eminent
Flats at The Manhattan are priced at $3,200 per square foot and the smallest flat is 1,600 square feet, so the building isn't aiming at casino floor workers. Jimmy Yeung, sales director of Midland Realty Macau, says that the target clients of this kind of selective luxurious apartments are not ordinary families, but moneyed classes from greater China and around the world. Macau has gotten on the jet set's radar as it begins to add world class shopping and other facilities, so it follows that Macau should have some world class homes as well. With the support from these four types of buyers, international investors still believe there's a healthy market for luxurious apartments in Macau.

...MORE: http://www.skyscrapercity.com/showthread.php?t=427664

Your Invitation to the High Life ... 2006 Dec 01 - 17:47

Luxury residential properties are springing up in Macau to do justice to the glitz of the gaming destination

As wealthy people increasingly come to play in Macau, more of them want to stay. A new crop of luxury residences are springing up to accommodate them.

As local wages rise on the back of the economic boom and investor dollars show no signs of waning, high-end residential properties and serviced apartments are also mushrooming in Macau to satisfy consumers' increasingly sophisticated tastes.

Privileged location
For the ultimate indulgence, a villa in a secluded location away from the city bustle, but not too far away, is indispensable.
Penha Hill has long been the abode of Macau's privileged few. Its dwellers not only have large fortunes to spend, but also enjoy high social status. Due to Macau's tiny size, plots that are eligible for the development of villas are quite limited. This makes a Penha Hill address all the more desirable for people who can afford tens of millions to pamper themselves just a little.
Flying Dragon Villas, a group of 10 mansions on Penha Hill, have sold out before their completion. Buyers include well-known business personalities from Macau and Hong Kong.

Invitation only
According to Flying Dragon developer Trust Construction and Investment Ltd, the strong response to the new property was no surprise. In fact, they anticipated oversubscription from the beginning, so sales of Flying Dragon have been strictly by invitation, ensuring these coveted villas go to society's top names. This sales strategy helps sustain the success of a truly top-end property: exclusivity makes a property more attractive to eminent buyers while eminent buyers make a property more exclusive.
In the words of the developer, Flying Dragon is something so precious that money alone cannot buy it. But, make no mistake, you'll need a pile of money to secure an invitation.

Home grand home
Located on Penha Hill's prime location overlooking serene Nam Van Lake, Flying Dragon comprises a total of 10 three-storey villas. Many prominent and influential figures have called this area home, including the late Ho Yin, father of Chief Executive Edmund Ho. Today the site abuts New Bamboo Garden, lodging for visiting leaders from Beijing.
Flying Dragon villas' useable floor areas range from 8,141 to 13,223 square feet, with price tags of MOP60 million to 70 million (US$7.5 million-8.7 million). Comparable villas in neighbouring Hong Kong would cost at least twice as much. No wonder Flying Dragon has stirred up considerable interest in Hong Kong.
Every villa has unique features designed to impress. Each home includes a semicircular balcony showcasing panoramic views of Nam Van Lake, and four larger villas include a garden covering more than 2,000 square feet.
Industry observers believe market demand for top-end villas will continue to swell. So developers are scouring Macau's limited landscape for more sites to build luxurious homes to satisfy increasingly rich tastes.

Filling the luxury gap
There used to be only a handful of residential properties in Macau that satisfy international standards for luxury. But extravagant properties are multiplying to fill the gap.
The Manhattan - A175-unit development being built by MacauLand Holdings and Citigroup Property Investors. Located right off the Cotai Strip, the twin tower project is scheduled for completion in January. The Manhattan will feature a 17,000-square foot clubhouse. The property will be managed by British company Savills. Since sales of its north tower began in late June, about one-third of the 85 units have been sold for an average price of HK$3,200 (US$411) per square foot.

One Central Residences - This mixed-used waterfront project located between the MGM Grand Macau and Wynn Macau is a joint venture between Shun Tak Holdings and Singapore-listed Hongkong Land. With a total site area around 200,000 square feet, One Central includes 800 units in seven residential blocks of 32 to 38 storeys. It will also feature a clubhouse with indoor and outdoor pool as well as a landscaped garden. Though it is due for completion in 2009, two of its entire blocks have already been sold. London listed Macau Property Opportunities Fund Limited paid HK$673.4 million, a Macau record HK$4,550 per square foot, for a 59-unit block.

by Alan Tso: http://www.macaubusiness.com/index.php?id=640

Richard Branson Betting on Macau
January 27, 2007

Sir Richard Branson's Virgin Group is close to securing a 20-hectare site in Macau to build a US$3 billion ($4.3 billion) casino complex which could add to the city's rise as the world's gambling capital, a newspaper reported yesterday.

The flamboyant British entrepreneur whose business empire ranges from airlines to music and mobile phones, is close to acquiring the site in the Chinese special administrative region, the Financial Times reported.

"We hope to get all the boxes ticked in the next couple of months and start developing the site soon afterwards," Branson was quoted by the paper as saying.

The paper said Branson had held talks with Macau's leader, Chief Executive Edmund Ho, on Wednesday to try and confirm arrangements for the planned entertainment complex featuring three hotels and a casino, which could open as soon as 2010.

Macau recently dethroned Las Vegas as the world's biggest gambling centre, with some analysts predicting its gambling market could more than double to $14 billion in revenue by 2010.


Two of the world's top gaming firms, the Las Vegas Sands Corp and Wynn Resorts Ltd have already built mega-casinos in Macau and other world-class competitors including MGM Mirage are due to pile in later this year.



- REUTERS

DrBubb, what are your thoughts on Macau?

I'm bullish, and considering buying there.
See my other thread: Macau on GEI

- -

ONE-CENTRAL SALES BOOMING
xxx from today's HK Standard, pg.A5:

ShunTak (HK:242) says they have generated more than HK$6 billion in sales at One-Central.

+ 90pc of the appartments have been sold
+ about 700 units, at an average selling price of hk$5,000 ((796 units in total))
+ top prices were as much as hk$6,300 psf
+ an entire block of 68 flats went to an Icelandic insurance co. for hk$782mn (hk$4,400 psf)

ST's other project: Nova City at Taipa Island ((JV with Hopewell Holdings))

+ 40 apartments sold at an ave. price of hk$2,500 psf, prices up 2% last week

Another new project: Harbour Mile, at Nam Van, adjacent to Macau Tower; sales launch end-2007
:: offers 3.8 million sf of office, residential, and retail

Loacl residents account for ONLY 10-20% of residential transactions

Despite all this, ST shares slide 5.8% to hk$10.48

From SQUARE FOOT- early Feb. edition----

Before One Central Residences- which sold at an average of $4,360 psf-
normal residential new buildings were fetching $2,300 psf. New buildings under construction:
"I dont think they will exceed One Central but at least they will fill the gap", says Ronald Cheung of Midland

Macau could be set for rampant growth. He says he expects: "Overall residential values to rise by 20 percent
to 30 percent in a matter of months"

+ Even in the secondhand market, they are enjoying good sales performance
+ CapitaLand, Singapore's biggest developer is moving into Macau
:: they will pay $658mn for a 20Pc stake in Macau City studios
:: overall project will cost $15.6billion, and they are expecting a 15pc annual return

However, S&P ratings service has warned of rate cuts, because things are moving so fast

Wynn Resorts, has been so impressed with results at is $9.3bn casino, it will double the size

Rising Prices of luxury properties

Prices of Macau apartments that cost 3 million Hong Kong dollars, (US$386,000), or more rose "between 50 and 100 percent" in 2004, said Dick Fong, a director at Midland Realty. Property prices in the prime Nape and Zape districts, where the most active gambling joints, Casino Lisboa and Sands Macau are located, have exceeded 3,000 Hong Kong dollars a square foot, from less than 2,000 Hong Kong dollars a year ago, according to Jim Ng, a Macau-based associate director at Savills, Britain’s third-largest property consultancy.

1,800 bid to buy 56 condominium units

Bloomberg News reported that 1,800 people have placed their names on a waiting list with Cosco Property Development, to buy apartments in a planned condominium development in Macau where only 56 units are up for sale! The report also stated that Bich Pham, a fund manager at TAL Global Asset Management in Hong Kong said, "If you want to invest in Macau property, do it now, Macau will be bigger than Vegas."

Macau slated as the world’s most densely populated city

Macau has been declared as the world’s most densely populated city as of July 2005, according to ExxUN.com a compiler of world records. According to the compiler Macau had a population density of 17,685 people per square kilometer land, ahead of Monaco with 16,620 people, Hong Kong with 6,621 people, Singapore with 6,483 people and Gibraltar with 4,290 people, living per square kilometer land area.

OLD, but interesting: http://www.macaubusiness.com/index.php?id=30

JUST BACK from Macau - spent CNY there.

Prices have risen too fast- so I reckon I have missed the opportunity there.
Maybe it will be worth a look in 2-3 years, if we see a correction

Just keep in mind people said that 3 years ago about Ireland and N Ireland yet prices seen a lot more growth since. There must be a lot of places in China with potential. Surely southern nice coastal areas - Im guessing here but a nation this size will put overwhelming demand on prime beach area real estate in the comming years??

Could prices go higher?
SURE. In fact, they are likely to do so, since momentum is huge.

But teh easy money has been made. And I think the risk/reward is no longer attractive.

Having looked at it closely, i will avoid Macau.

HONG KONG looks a far better opportunity right now...

for those interested in fundamentals, consider:

SOME BULLISH POINTS from Today's Hong Kong Press

+ HSBC set to Spark martgage War- (Front Page Headline)
.. HSBC dropped its mortgage rate to 4.87 percent from 5.00, plus a cc-spending rebate of 0.88%
Ina survey by Ricacorp, 46 percent of 100 buyers said the rate cut would speed up peoples' buying plans.
(note: HSBC has the largest market share at 17.6 percent, with BOC at 15.9%, HangSeng at 13.8%)

+ Investment banks see upturn in home sales (Standard. pg.A6):
.. Thanks to: wealth effect of buoyant stock market, and wage rises... plus strong RMB, low deposit rates.
Also: "from now until 2009 there will be a severe imbalance between deamnd and supply (in residential market)
The deleivery of flats will fall from 35,000 units in 2002, to 12,000 in 2009, while the market absorbed 24,521 units
in the period 1998 to 2003. Andrew Look of UBS said.

+ Rates forecast to hit 12-year lows- (Property-P3-Stan.)
.. Real interest rates, or the interest rate minus the prevailing inflation rate are likely to fall to about 1.5 percent this year, a 12-year low. This compares with an average of 3 percent last year

I'm based in HK and have just invested in Macau. Can you pls quantify what you saw and what price. Also, what price do you think is 'worth a look'

can we continue this conversation ... here ??

Basically, I think HK is a better bet, and I dont like to buy into markets when they have gone parabolic.
Because parabolic moves are oft' followed by crashes

Will revert to your link.
I bought 2 flats in One Central Residences in Macau on launch day. There were many bankers spending their bonuses and other professional investors there. Project sold within a week. Latest release approx 1 mth after launch fm developers say it is 95% sold (think this was late Jan 2007) (ie some choice units, penthouses may have been kept). According to one developer, latest units hit HKD6300psf (indicating latest batch, maybe 6k). Launch average was HKD4400psf.
The invested funds (eg MPO.L) can sell if 90% launch. Would anticipate that if they sell early, they will sell for HKD7000 ave since they have choice blocks. They may sell when The Venetian opens in 3Q2007 or wait til completion for an even higher gain (reckon over 100%)
For details, I have posted the models of this and Macau in www.skyscrapercity.com (see Asian forums, HK & Macau, Macau.
Have also bought in Singapore earlier. Looking at 50% gain soon (approx 1 year or 9mths since deposit of 20%).
Have also considering increasing exposure to HK, but compared to other markets, return looks 'reasonable', thou understand if you feel Macau has gone parabolic.

This is why I ask, DrBubb, what is reasonable for One Central and other properties in Macau ?? I am too targeting a gain of 100% on completion of One Central. So I think prices are up almost 50% with another 50% to go.

i answered on GEI.
here: http://www.greenenergyinvestors.com/index....=1450&st=40

basically, chasing markets with straight-up momentum, is not my preferred way of investing,
particularly after they have gone into the "parabolic phase" which i think is now the case in Macau.
the huge apparent gains over the past six months have put me off.

In HK, i have bought a correction, paying 20-30% less than peak prices, in a development i like.
And now prices seem to be pushing higher, back towards the old highs. I like the funadmentals in
HK also.

In Macau, you will always have the risk that China shuts the gates, which are open now,
or permits gambling elsewhere

COMPARING THREE ECONOMIES

Economic Indicators : Macau : HongKong : Shenzhen
Period................... q1-q3'06: .. 2006 .: .. 2006
Real GNP.............. : +15.4%: . + 6.8% : . +15.0%
Exports................. : +18.6%: . + 9.4% : . +34.1%
Tourist arrivals...... : +17.6%: . + 8.1% : . +12.5%
Bank Loans OS...... : +15.2%: . + 2.7% : . + 9.9%
Unemployment rate : .. 3.5%: ... 4.4% : ... 2.3%
Inflation rate.......... : + 5.4%: ... 2.0% : ... 2.2%
Property prices....... :

It is unlikely China will shut the gate. With USD30bn investment in casinos and hotels, these investors will make sure that this will work (not just casinos, but MICE, hotels, entertainment, shopping, just like Las Vegas). If shut, there will be riots in Macau due to job losses. They can't let that happen. China panicked when 250k HK'ers marched in the streets after SARS, and they then implemented CEPA and made sure money flowed into HK afterwards. They won't repeat this mistake.
Macau is and will remain the only place in China with legal gambling. This was a historical legacy (ex colony of portugal. It was something they wouldn't have wanted anywhere in China if they could have).
A second, unspoken but important item is that Macau allows China gambling to be controlled in one location. Every govt official (or China citizen) going to Macau is registered at immgration. If casinos open everywhere, eg Shanghai, then a govt official with a suitcase of XXXX can cleanse his stuff without the govt knowing. By keeping it in Macau, they know who has been going there and can monitor it. Obviously, no one in China and Macau point this out.

So, the US can have gambling elsewhere (Atlantic City, New Orleans, Indian reservations). But not in China. Singapore will slightly compete, and Japan and Korea may consider opening something, but not in China (HK is possible, since it is semi-autonomous like Macau, and in fact wants it as Singapore has casinos - but this will NOT happen untill Macau is so successful that it no longer makes a difference and they have run out of land. Again, China will not let Macau's economy to be hit. This is another unwritten rule - HK can have the IPOs instead. Macau has a unique, permanent competive advantage in Asia, and I'm sure this is why Sands, Wynn (and Branson, PBL, Star Cruises/Genting) are in.

Yes. Hainan Island. Warmest weather in China. Only tropical locations (tho not quite as tropical as Thailand). Similar latitude to Philippines. Location of 3 Miss World competions. 50 mins flight fm HK and Macau.
However, don't think Chinese people like this lifestyle. They prefer shopping designer stuff. Hainan island historically is where exiles were sent to (and described as Hell on earth !)
Land is cheap still, but some have moved in as it has lagged the rest of China.

However, given what happen to another exile/convicts place (Australia), I may be interested in buying land one day and developing a resort !!!

Astounding figures fm Macau. SCMP quoted 2007 prices up 30% for Macau, tho HK was said as safe for long term and Shenzhen cheap.

Re: GDP/capita is almost HK. Casino business easily allows big increase in GDP (ie if casino spend up 10%, Macau GDP goes up by almost as much). At this rate, wont be too long if Macau has a GDP/capita to be more than Switzerland - of course doesnt mean ave joe will have similar wages. With the big casinos yet to open, GDP can easily double.

Re Tourist figures, I believe HK & China tourist are basically equal in numbers in 2006, and account prob for 98% of tourists. So I think if figure is 20m tourists, half are from HK a population of 6.7m. The other half is fm China, pop 200x HK. I think this is called massive potential growth. Although I wont be daft and fully extrapolate fm HK's figures, but if only 5% of China visits compared with HK visitors=100m China visitors. Guangdong, the neighbouring province has 60-80m population. If they did what HK'ers did, that implies 100m fm GD alone (ie approx 1.5 visits per head) !!!!
Basically, Macau can double tourists to 40m and fill its hotels/casinos etc, and that is still just scratching at the market !

those increases are possible...

But will other destinations, like Singapore, HK, Hainan, Philippines, etc

just sit back and watch it happen?

Philippines is always a basket case. Once the highest GDP in Asia or SEA I believe. They had as much potential for tourism as Thailand, Malaysia and Indonesia (Bali), but can't manage more than Cebu (which is 'successful' due to casino) and Boracay (tiny).
Hainan is always a mess. They keep speculating and blowing money away. Similar to Philippines possibly. Has fair number of mainland tourists, potential in beaches, but I think this may be too Chinese for it to be international like Phuket. Maybe long, long term.
HK is trying. Disneyland is a not successful. But politically lacks willpower and is too confused (ie lacks leadership).
What came first, Macau or Singapore ? My Singapore investment made me look into Macau (tho SG saw what was happening in Macau first ?). Currently has much more direction than HK. Watch out for announcement that F1 GP NIGHT TIME RACE IN THE BAY wizzing past the new casino and financial district. This will really put SG on the global map, and make it look on a par with Monaco.
Latest transaction today at SGD4000+psf (equiv of HKD22k net). Record. Gone parabolic as well (maybe more so, as every core region has gone ballistic, not just 1 or 2). 1.5 years ago, luxury was about HKD5kpsf (or SGD1-1.5k psf), so this is a 3-4x increase in about 1 year. Population expected to increase by 50% also (2m+ for Singapore, 200k+ for Macau) in less than 10 years.

Singapore shows what can happen when the waves of hot money hit a market.
I think we will eventually see this in HK. A possible trigger is a fall in the HK$, as the Us dollar link drags it downwards. That action may start as earlier as this year- but do not hold me to it.

Nothing is forever, including the underperformance of the Philippines. But a move away from "basket case" status will require a more enlighten political leadership seems difficult to find in the beleaguered country

(from GEI, relevant here too, maybe):

"BEARISH Story on Macau Casinos in today's SCMP, entitled:
"Winning Run ends as Macau Plays tumbles"

It talks about:

+ the 22-26% falls in the main two US markers, WYNN, and LVS
+ shares in Melco have plunged as much as 40% from their Dec.19th debut on Nasdaq
+ "the shares remain hugely expensive, and investors and analsyts are worried about rising costs in Macau, underwhelming growth in visitor spending and infrastructure bottelnecks"

+ "the current trend doesnt support the massively bullish argument- that you build it, and they will come, and that each time you open a new property, you are going to see a surge in visitations from the mass-market Chines visitor
+ Despite an 18 percent rise in vistations, spending per visitor rose only 1 percent
+ Gaming revenues from the walk-in mass market appeared to be growing at a 30 to 40 percent clip, and the VIP market looked aneamic at 3 per cent
+ Important, because margins on mass-market are 35 to 40 percent, against only 10 to 15 percent on VIP business (due ti big fees paid to VIP tour organisers). However, there was an error in the data collection. The real figures were more like: 15% and 9%, respectively.

= =

THIS IS CASINOS,
But some of the disappointment is likely to spill over into the Macau property market, especially if disappointing share performance continues"

ABRUPT SUSPENSION

Macau has made an "abrupt suspension" of its investment migration scheme. The scheme allowed those who invest 1 million patacasa and depoist pt.500,000 in a Macau bank to gain permanent residency in Macau. Most applicants (90%) were from mainland china, but these were also required to have a non-Chinese passport- easily acquired for between pt.40-50k from an African country.

Applications had soared to 4,000 before the suspension; and the level was over 3,000 in 2006, compared with 800 in hong kong.

By comparsion, such right requires a minimum investment of hk$6.5 million in Hong kong.

One reason for the suspension was that critics blamed it for a property bubbl;e which has left ordinary local unable to afford property.

Observers believe a new scheme with introduced, with a higher minimum, such as pt.3 million.

It will be interesting to see what impact the suspension will have on Macau's property market

This has been mentioned prior to suspension. Since mass market prices have basically almost tripled in the past few years, this has created tension in Macau. Basically the limit was way too low. Of the new migrants 90% were from China mainland. If you look at the migrant scheme, the average asset paid by these migrants was just over MOP/HKD1m, hence pushing up low/mass market property. Secondly, Macau residency allows mainland Chinese tax advantage due to a double taxation treaty so Macau residents are only taxed at Macau rates for China business (hence not many HK'ers took advantage of this since HK also as a tax treaty at the same rate with China. Finally Macau passport allow more visa free travel and convenience (again, HK passports are better so no need to apply). Hence basically mainlanders (probably fairly rich businessman) just bought the minimum in terms of flats, kept them probably empty and stayed to do business in China (apart from the odd weekend gambling).
The effect of this, if they raise it to pt.3m, will probably reduce activity in the mass market (esp pt.1-2m, or mass market or around USD125-250k). However it will boost prices in the luxury end (over pt.3m), where most of the supply is. As one agent mentioned, this scheme accounted for 15% of ALL purchases, and looks like most of these purchases were just above pt. 1m.

In the SCMP, it was reported that foreigners accounted for 34.5% of all property deals in 2006 but over 50% of value. The foreigners (HK'ers, expats etc) are buying the LUXURY units. Of the foreigners, 45% were HK'ers, 40% mainlanders from China. Since the recent rise in headline rate is due to luxury and foreign speculation, this should not affect upper end prices.
Basically this is a political act to calm the general working public. The middle and upper classes (practically by definition property owners) would like to see these property rise. So Macau govt has to keep mass market housing affordable while keeping the luxury end boyant.

Practically all equity analysts have factored a slow growth rate for VIP/High spend customers. The hype and share prices of the casino plays went a bit over the top (not surprising - if you see the number of new casinos springing up, there will be too much short-term competion). Macau generates 3x income per casino table (ie with 1/3 of the number of tables, it generates more money than Las Vegas). It shows just how strong the VVIP segment is, and will only grow in line with the number of UHNWI's. The focus of these new casinos has always been mass market (ie how to get more punters into Macau) and on other new businesses (like LV, MICE or conventions, plus their shopping). So your figure of 35-40 percent mass market growth is still fabulous and in line with expectations !!
Going back on your points. There has basically been a surge of visitors each time a new casino opens. Each major casino so far has had the same effect a HK Disneyland !! Hence still a very good rise in visitors of 18% (nb the new casinos only opened 4Q06 and 1Q07 with the big ones yet to come).
1% spend per visitor rise is still excellent when 18% increase in tourists (ie almost 20% more spend overall) !!!

Comparing HK, Singapore and Macau, the latest figures now show Macau has overtaken HK in 2006 for GDP per capita. It went up 15+% so now exceeds HK around 5% (Macau 194,500 pt. to 227,508pt, HK$202,941 to HK$214,710 or USD27k). Momemtum indicate that Macau will continue at this clip so HK will fall much further behind.
Also note in the past year, casino workers pay went up from 12k pt. /month to 18k pt. If you have a couple, then at 36k pt. (USD4.5k per month) housing will become affordable even the high current prices. This level is twice HK's ave household income (I believe around HK$18k/m).
Can't remember Singapore's figure, but I know it is now higher than HK's. So if not already, then Macau will soon have a higher GDP than SG and probably soon overtake Japan !!!

-- be careful / macau government policies are not popular with everyone --

SHOTS FIRED AT MACAU RALLY

Bullet strikes man in the neck as police battle with angry protestors
during march against labour woes

Police fired shots in the air and beat protestors back with batons yesterday as a Labour day march by thousands in Macau erupted in violence

Incensed by a lack of jobs and low pay while mainland labour flodds in to drive Macau's casino boom - and accusing the government of corruption - the protestors mounted the most direct challenge yet to Chief Executive Edmund Ho Hau-wah, calling on him to step down.
. . .
Police put the number at 2,400, while the rally's organisers said it was 10,000

- -

Macau Inter-University associate professor Camoes Tam Chi-keung said the protestors were mostly malke construction and renovation workers in their 40s and 50s who felt exploited and abandoned by the city's economic boom.

"Casinos and hotels are rising everywhere, but foreign labour from hong kong and illegal labours took their jobs. Prevailing corruption among government officials and businesses was the main cause behind the protest," he said.

Professor Tam said it was the first time civil servants had atken to the street since the 1999 handover. What happens next depends on how chief executive Edmund Ho hau-wah divides the cake/

Well, that's GDP per capita: Not actual median income per capita.
What's the Diff?
Much of the growth in GDP reprsents recvenue at the casinos, only a little of which will ever find their way into the pockets and spending patterns of Macau based people.

Ironically, several of those casinos are controlled by HK-based people, and this is offshore income for them. But they control the revenues, and profits, and some of that income may find it way back to HK, without being reported as part of HK GDP. Jake Van Der Kamp made thsi observation recently in the SCMP

Most of the buyers of these luxury properties will not be locals. So, in this segment, GDP/wage income etc. will not be the factor. GDP growth just indicates that the economy is booming, and that visitor numbers are up, and people are spending money. Ultimately, this results in jobs. Of course, the May day demonstrations will indicate that not all will benefit from this. This GDP growth will probably result in more expats coming in (hence, Macau's govt needs to balance the interest of low-income families).
A Macau minister recently commented that Macau needs something like 200+k extra workers. That is double the existing working population.

Some of these will be expats (maybe HK'ers, Mainlanders, Filipina, Singaporeans, with some senior management from the US/Europe etc). In addition, there will be shopping (so managers) and MICE (other workers, expats, needed). Finally, if Cirque de Soleil and other entertainers (like HK/Korean/Asian film/pop stars) come in, you can rest assured they can buy these luxury properties. Rumours are they have already.
Man U will be playing in Macau in late July, first big MICE event will be in Oct. Venetian will be open late July, full launch in Sep/October.

Prices in Macau are now at HKD10+m for 3 beds (so USD1.3m +) in other luxury developments (One Grantai, Arc of Triumph) or HKD5k psf. One Central Residences now at HKD5k-6.8k psf. 1CR 2 beds or lower have gone up 25-30% since November 2006. Larger units, due to supply, up 15-20+%. Expect prices to increase up to 50% by Venetian opening (ie 1 year after 1CR launch in November). Even at this level, prices still cheaper than HK luxury units, so potential, if it works out, will be to match HK luxury prices (ie HKD15-30k psf). There may be some new supply coming, but if HK has high prices due to scarce land, Macau has even less land !!!!

Sorry, correction, labour shortage figure in Macau is much higher than 200+k. It is actually needs to more than double it's existing workers in 3 years.

From SCMP 29 April 2007
It is believed the city has a shortage of between 50,000 and 100,000 workers. Government economist Lao Pun-lap estimates the city's labour gap will grow to 350,000 in three years. Currently, Macau has a working population of more than 280,000 including 70,000 imported workers.

Tis could be Bullish, or at least slow the bearishness trhat has been creeping in:

According to yesterday's SCMP:
Macau tightens policy on Approvals
Investment plans by HK property developers may be delayed indefinitely

Why?
certain applications for high plot ratios and so forth have been delayed.
Developers are putting their plans on hold. HK developers have announced projects worth hk$10 billion or more

LIGHT RAIL
Here's a map of the planned system


-see: http://www.answers.com/topic/airport-shuttle-line

Yes, will restrict supply and boost prices on existing sales, but I can't see the delay being too long as Macau needs this supply. Problem is that there are still not many projects available now for intl investors, but this will eventually change. Then you'll see a lot more buzz internationally. And these include many serviced apartments in the Cotai strip later also (St. Regis, Sheraton etc).
Bearishness ? Can't detect any in the luxury sector, totally different market. Visitor numbers up 30% in golden week vs 20% in HK. Those who went to HK spent lots of $$ shopping, so bodes well for Macau's retail (seems like China tourist visit both places, but shop in HK - this will be bad news for HK retailers). Results from Wynns were excellent, Sands had profit drop, but nb revenues still went up 24.4% despite new competition from Wynns, Grand Lisboa, StarWorld etc opening, and their revenues should bounce back when Venetian opens.
1 new casino = 1 HK Disneyland in tourists (Disneyland had 11k per day, the Grand Lisboa had 70k daily visits during CNY !). And the actual story, the Venetian/Real Las Vegas doesn't begin until July opening.
Admittedly, prices are high as they've risen a lot. But London was also high a few years ago. If Macau succeeds, becomes only half of Las Vegas, then it can match HK prices due to limited supply (ie. can double-triple existing high price of HKD5-6k to 20k psf). And there apparently has been growth in private banking to cater for the high rollers/mainlainders with dubious income. Mainlanders/HK'ers can also afford these prices - Shenzhen luxury is now apparent near HK$4k !! Some projects in Shanghai are at HKD10k psf !
I look at GDP growth/Money Inflow = immigration = housing demand for investment. This is the same story for London/UK, Singapore, etc. HK does not really want immigration, hence demand is limited even tho it's doing OK. But it means HK cannot experience huge growth in property prices unless demand/immigration/expats build up even more (now it's OK due to IPOs).

April 28, 2007

Comments from Rob Hart, Morgan Stanley, who is bearish on casino revenues, hotel and retail property due to oversupply, but bullish on jobs growth and residential property (however 10% property price rise is one of the lowest figures I've seen tho ) ...

.... On the other hand, Hart believes residential property prices are likely to rise by approximately 10% per annum for the next few years due to an increasing population and robust job growth.
“For the next three years the supply is quite transparent. You have got about 6,500 units per annum, while demand will be 8,500, so there is definitely a bit of a shortage of supply out there,” he says. “Where the growth is coming from is the more sustainable jobs that have been created. With each new casino you have 4,000 or so new employees…3,500 for Crown…Venetian has more like 10,000. These people are going to have to stay there permanently,” he says.
Hart suggests the hotel and retail sectors should be avoided over the next few years. But investors still have other ways to make money in Macau, he says, suggesting through investments in property funds or in companies that devote part of their resources to property businesses.

HK ENTREPRENEUR's GROUP meeting coming up
see: http://www.greenenergyinvestors.com/index.php?showtopic=1960

= == == =
(Info for meeting):

I found this report:
http://www.colliers.com/Content/Repositori...7-Knowledge.pdf
EXCERPTS:
1/
Thanks to the wealth effect attributed to the buoyant stock market prices, the average luxury
residential price increased 1.6% QoQ from HK$9,753 per sq ft in November 2006 to HK$9,910 per sq ft in February 2007.

• Given the positive buying sentiment, luxury residential prices are predicted to increase 16%
in the next 12 months. Luxury rentals will rise further by another 9% during the same period
in anticipation of the sustained leasing demand attributed to the financial sector.

People who live in Macau tell me that property prices are falling now-
especially at the low end

Yes, some believe very cheap housing may fall 20%. This end has gone up around 120% in the past 2 years. This was because of the suspension of the immigration policy (which encouraged mainland citizens to buy). Before suspension, this end (<50 sqm) went up 42.5%yoy and 20% in the QOQ (i.e. latest full quarter was 1Q2007). So this possible fall (2Q not released yet) will take out the 20% speculative run in first 3 months.
Prices of buildings under construction saw price increase of 31.8% in 1Q2007 compared with 4Q2006 (probably 1 Central) to average of MOP3.81m each (approx USD450k).
Admittedly, there has been 1 peice of bad news in late May - the neighbouring province of Guangdong will make it harder (esp for its own officials) to visit Macau regularly to "promote responsible" behaviour/gambling.
However, most still expect gambling/GDP to go up by at least 10% this year as the opening of the first Las Vegas casino, The Venetian in late July. Also events should boost attraction with following ManUtd and NBA (July), Sampras vs Federer (Nov), conventions, including its biggest for Asia Financial Services have been booked. Finally, resumption of immigration policy and open, transparent land auctions expected later this year (first for 10 years) is expected land auctions.
On a final note, Speymill Macau has raised a further USD80m for Macau investment very recently, plus further investment in Macau by Oaktree Capital (LA based fund). Last year Speymill noted some reports saying Sands' Cotai serviced apartments are expected to sell at overHKD6.4k psf, the Four Season branded vacation suites at over HK$10k.

Today Venetian opens.....

Hype in Macau has begun again. Ads in HK in newspapers, TV (local and English), plus CNN and CNBC.

One Grantai official launch (guess coinciding with Venetian opening) during last weekend only has 40 units left !!!!(total over 1k) - however not sure if phased released or not so - I'll check. Anyway, HK media has reported sales being very very hot, with prices now hitting HKD7.6k psf (min average price HKD6k psf)
I originally posted details back in April during soft sales at prices of HKD4.5-5k psf (tho I think these units had lesser views) see:
http://www.skyscrapercity.com/showthread.php?t=468402

This implies price rise of 50% in a few months ....

In addition, One Central has hit HKD6.8k psf (making it undervalued - I think ICR is better in terms of views, location, supply etc).

Other hype has seen agents predicting rise of over 40% this year from Colliers (also agent for Grantai), and Midland. Midland head quoted as saying (from memory) that Venetian launch will set new benchmark for property, saying in 2002 (liberalisation of Casinos) prices were HKD800psf, Sands launch (2004/5) HKD2k psf, Wynn (2006) HKD5k, Venetian launch HKD10k (this year) and in 1-2 years time other benchmark casinos (MGM Grand, Studio City, City of Dreams, Galaxy Megaresort) HKD20K !!!

i would not even think about paying such prices in Macau.

I'll be back over in September for another look.
But based on my last visit, I have basically given up on Macau.
The easy money has been made.

Best way to buy now, might be to pick up shares in the UK-quoted Macau property funds,
if they slide lower. See: MPO.L and MCAU.L

Confirmed, almost all sold out, with 770 units sold according to HK papers. Another update says latest prices have hit HKD8.4k psf.
I think there must be a lot of very rich mainlanders who must have bought. Some maybe from questionable sources, some from the stock market (up 250% in 2 years), some from the booming Shenzhen market (prices for new flats up 50% in 6 months). The Chinese are coming to both Macau and HK property.
The goodish units cost USD3m each !!
MPO esp seems to be a very good investment now.

(Maybe this is the reason that Chinese investors are headed to HK & Macau: higher rates in China):

Shenzhen Agents Cool their heals despite Peak Season- says SCMP

"Developers in Shenzhen look set to defer their high season launches as tighter mortgage lending and concerns about further property cooling measures cloud buying sentiment, says property agents.

This month and next month are traditionally the peak season for flat sales, coinciding with the end of the summer holiday and the national "Golden Week" holiday. But some developers have still not applied for pre-sale permits in view of market uncertainties...

Sales in the primary market were down 30 per cent last month from August last year at 4.1 billion yuan, and the number of transactions fell 40 per cent to 2,500 units or 220,000 square meters.

Another record set at One Grantai. This is time it is $8600.



http://www.singtao.com/yesterday/pro/0905ho04.html

Just came back from Macau.
I was told the One Grantai effect is spilling positively over to the rest of the property market. Most Taipa properties are asking for 10% more now. The offering of the bigger units at One central is above 6k per sq ft now as those below 6k have been taken up in the last 1-2 weeks.
Today, there is report Harrah just bought the peice of land with golf course at Cotai even though it does not have the gambling license yet.

DrBubb:

the analyst from Citigroup seem to support your view and quote as follow on the report on 13th Sept :

Almost one in every three new residential
transactions in Macau was confirmor transaction for the first seven months in
2007. In contrast, only 1.2% of total new residential transactions in Hong Kong
were confirmor transactions in 7M07.

The average local Macanese family
simply cannot afford to spend 61 cents on a dollar of income to buy a new highend
apartment in Macau. Our affordability analysis also shows that even renting
a unit at Villa de Mer, Polytec’s development in Macau, could be difficult.

The pre-sale of One Grantai, a luxury residential project at Taipa developed by a
local developer, was recently launched and confirmor transactions at a price
above HK$5,000 psf were achieved. The affordability index is going one
direction only, in our view, suggesting that residential properties in Macau are
becoming less and less affordable to local Macanese people. We maintain our
view that the high property prices in Macau are not sustainable in the long run
unless end users earn higher employment income.

thnx for that update

you might find the threads on GEI are more active now

(says article in today's Standard):

Macau Luxury residential prices are galloping away,
and may catch up with Hong kong in two years

+ macua's inflation is above HK's: 5.36 percent. vs. HK's 3.4 percent

+ Expat numbers are expected to rise by 93,000 between thsi year and 2010

+ Jones lang Wooton estimates that 25,000 residential units will be needed in the next
three years. But only 19,256 will be available.

Example:
Novacity first sold at pt.1400 (HK$1,359) in 2005; now is pt.2,800- a nice double!

To maximize gains, Lui suggests investors turn to old units, as entry cost is low.
The city has about 200 villas- which would be favored by expats

Projections for Macau:
LUXURY MARKET :: -2005- : -2006- : -2007- : -2008-
Rents............... :: +17.7%: + 3.7%: +22.3%: +20%?
Sales prices...... :: +13.2%: + 6.9%: +28.5%: +25%?
Yields............... ::. 3.60% :. 3.50% :. 3.30% :. 3.17%?

Price Pressure pushes macau residents to move to Zhuhai - says SCMP

"Macau's exploding casino economy is putting enormous pressure on prices across all property sectors in the island, especially residential units. As a result, a tide of Macau migrants is seeking refuge in Zuhai's relatively balanced property market."

Macau prices rose 31 percent since 2006 (that's residential and commercial)

Price comparisons:
Macau. : HK$3 - 5 million for 100 sm - 150 sm
Zhuhai : HK$1 - 2 million for 100 sm - 150 sm - actually, that should be in yuan, which is valued higher

"We have observed an increase in non-skilled workers seeking residential properties in Zhuhai, but not an increase in skilled workers, or indeed business relocating to Zhuhai," said John Nichols of Jones Lang Lasalle

Some exceptions need to be made for certain luxury developments:

Grand Panorama- almost 40 percent of the 3,000 luxury flats have been bought by Macau residents- says agent Rita Fei

some families want to escape a "casino environment"