china/hong kong update · punggol creative cluster jurong innovation district new spaces to support...

China/Hong Kong Update

Nicholas BrookeChairman, Professional Property Services Limited

Chair, ULI Asia Pacific

Hong Kong SAR

2

Hong Kong Today

DemographicsTotal land area 1,098 skmPopulation now 7.2m residents but growth slowing and dependent on immigration50% of land mass is Country Park or Green BeltApproximately 24% developed to date with half of population living in the urban areas

PPS

Developments in Hong KongOne country, two systems under pressure – much attached for upcoming Policy AddressHousing and land supply key issues plus cost of housing and doing businessRents and prices (both residential and commercial) highest in the world –is the premium justified?Liveable city agenda – innovation and technology seen as underpinning growth and change but regulatory change needed to support this approach Greater Bay initiative likely to have fundamental impact – will Hong Kong seize or miss the opportunity

PPS

Total Stock of Private Residential Units by Classin Hong Kong (2017)

Classification of Residential Units by Class :

Class A - saleable area less than 40m²

Class B - saleable area of 40m² to 69.9m²

Class C - saleable area of 70m² to 99.9m²

Class D - saleable area of 100m² to 159.9m²

Class E - saleable area of 160m² and above

Source: Hong Kong Property Review 2018, Rating and Valuation Department

Updated as at Q3 2018

Class A (366,520 units)Class C (142,878 units)

Class D (65,640 units) Class E (26,821 units)

Class B (572,769 units)

Hong Kong Residential Market (Overall)

Supply, Take-up & Vacancy (1997 – 2019F)

Source: Hong Kong Property Review 2018, Rating and Valuation Department


*Take-up figures represent the net increase in the number of units occupied in the year under review and are arrived at by adding the completions in that year to the vacancy figures at the beginning of the year, then subtracting the year’s demolition and the year-end vacancy figures.**Vacancy at the end of the year as a percentage of stock.

0%

2%

4%

6%

8%

10%

0

1

2

3

4

5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F2019F2020F2021F

Vacancy Rate (%)Net Floor Space(Million sq.ft.)

Supply Net Absorption Vacancy Rate

Hong Kong Grade A Office Supply,

Net Absorption and Vacancy (2005 – 2021F)

Source: CBRE


0%

2%

4%

6%

8%

10%

0

100

200

300

400

500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Vacancy Rate (%)

Rental Index(Q1 2005 = 100)

Central - Rental Index Central - Vacancy Rate

Central Grade A Office

Rental Index and Vacancy (2005 – 2018 Q3)

Source: CBRE


Central Grade A Office

Capital Value Index and Yield (2005 – 2018 Q3)

Source: CBRE


0%

2%

4%

6%

8%

10%

0

100

200

300

400

500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Yield (%)Capital Value Index(Q1 2005 = 100)

Central - Capital Value Index Central - Yield

Current Ownership PatternAll existing property rights recognised and continued following handover, together with underlying leasehold system – business as usual for the property marketStrata title – the sale of an interest in part of a building (apartment, shop, office, floor(s), etc.) permitted and very commonCommercial leases up to 9 years but with 3 year reviews; residential leases generally for 2-3 years only

PPS

Role of GovernmentEnabler and facilitator through provision of hard and soft infrastructureHighly dependent on land revenuesPrincipal generator of land supplyMajor owner and continued provider of social housing More recently becoming increasingly interventionist –“strong government” and more focused on PRD integration –City Region

PPS

Hong KongHarbourfront

The Ultimate Objective

16

Asia’s Edge: Connected, Smart, Livable, Mega

Belt and Road Initiative

Scott Dunn, Vice President, AECOM

The Long Road to Cathay by Severino Baraldi, depicting Marco Polo(1254-1324) traveling to China via the Silk Road


Belt & Road Initiative(2013 - )

Billion USD

A strategy to increase connectivity and comperation along trade routes

69countries /Eurasia / Africa 63% World’s population

4.6 Billion people

30% Global GDP

3+ Trillion USD Total Investment

900+ planned infrastructure investments per year over the next decade

Asia’s Edge: The Belt and Road Initiativefor Urban Land Institute Fall Meeting


Range of expected Chinese investment

Incorporates existing bilateral and multilateral agreements.

USD $600 - $800 Billion

Belt and Road Initiative Two main elements:The Belt – land corridorsThe Road - Maritime Roads

Six major economic corridors:New Eurasian Land Bridge (Active)

China–Mongolia–Russia (Semi-Active)

China–Central Asia–Western Asia (Non-Active)

Indo-China Peninsula (Active)

China–Pakistan (Active)

Bangladesh–China–India–Myanmar (Semi-Active)

Building transport & digital infrastructure will bring development of energy and industrial clusters along these economic corridors.

New Roads

Recent launch of China’s first domestically built icebreaker named Xue Long 2 (雪龙2), support China's “special emphasis” on sea routes in the Arctic Ocean.

China Pakistan Economic Corridor (CPEC)

Flagship of the 21st -Century Maritime Silk Road initiative.

Game changer for Pakistan

US$46bn is funding a network of roads, railway tracks, pipelines, ports, airports and economic zones linking the Western part of China to the Gwadar Port in Balochistan, Pakistan running some 3000 km from Xinjiang to Balochistan via Khunjerab Pass in the Northern Parts of Pakistan.


Other Key Multilateral Regional Initiatives

1. CARECCentral Asia Regional Economic Cooperation (CAREC) Program is a partnership of 11 countries and 6 multilateral development partners. Rail and dry ports are a critical component of the transport infrastructure because of the land-locked nature of the countries.

2. GCCCooperation Council for the Arab States of the Gulf (GCC) is a regional intergovernmental political and economic union consisting of all Arab states of the Persian Gulf, except for Iraq. GCC launched common economic projects to promote and facilitate integration including significant investments to create rail networks for transporting freight, connecting cities, and reducing transport times.

3. GMS & ASEANThe Greater Mekong area sub-region covers parts of South East Asia and China. Program of sub-regional cooperation to enhance economic relations with agreements to facilitate trade, such as Cross Border Transport Facilitation, Traffic Right Exchanges

4. ASEANASEAN countries belong to a regional intergovernmental organization (overlapping geographically with the GMS). The ambition of the association is to promote cooperation and facilitate integration including an infrastructure blueprint .

1. CAREC

2. GCC

3. GMS & ASEAN

构建全球伙伴关系共建一带一路愿景

21/100There’re 21 Chinese contractors ranked in ENR top 100 International Contractors

Belt and Road contributing to China’s success as it “goes global”

7/10There’re 7 Chinese contractors ranked in ENR top 10 largest contractors by revenue

Top Chinese Contractors involved in BRI

Contractor Number of Projects China Communications Construction Co. 27 China Railway Group 16 China Gezhouba Group 8 Sinohydro Corp. 6 China Railway Construction 5

Companies’ in the Belt and Road Initiative

Policy ExchangeTop-Down Design Advisor

ExecutionLevel Main Player

Infrastructure Development

Trade & Investment

Supporting Factors ParticipantFinancing Social &

Cultural


BRI Opportunities

Policy Exchange - All relevant industries to engage in the discussion- Think tanks and policy consultancies

Infrastructure Development

- Professional services- Design and planning- Engineering and construction

Trade & Investment

- Trade opportunities for manufacturing and service sectors- Investment opportunities

Financing - Opportunities for financial institutions- PPP opportunities for both public and private companies

Social & Cultural - Cultural exchange and entertainment industry- Education, health care, sports


Belt and Road Real Estate Opportunities

Colombo Port CitySri LankaLead Party: China Communications Construction Company (CCCC)Est. Development Value: USD $15+ Billion

Belt and Road Challenges

GeopoliticalMany countries locate in regions with tensions, disputes and unstable internal political situations.

Increase time for project development & negotiation.

FinancialMany BRI projects are funded by Chinese government subsidized loans and executed by SOEs as contractors.

Private capital will need to be more involved in future projects via PPP models.

Challenging to design PPP models to be attractive for private investors, particularly for infrastructure projects.

OperationalLess established business environment as compared to developed nations.

Unexpected operational risks are a challenge such as timeline control and resources availability

Environmental and SocialMany countries with less stringent environmental and social standards.

Investors and contractors need to observe higher levels of ethics and CSR to effectively protect the natural environment and social & cultural heritage.

Important to create jobs and training opportunities for local people to support sustained development of the communities

Hwang Yu-Ning

Chief Planner & Deputy CEO, URA

ULI Fall Conference . Boston . Oct 2018

Asia’s Edge: Connected. Smart. Liveable. Mega

Population:

5.6 million

Small island city-state

Big needs

Background and Context

34

Boston (0.3X) London (2X) NYC (1.7X) Hong Kong (1.5X)

(277 sq mi)

(14 mi)

(27 mi)

What can we do?

Continue to plan for Sustained Economic Growth… and a good quality of life

“Our ambition now is to become a Smart Nation – using technology to better meet our people’s needs for the future, and to improve their lives. … each city has different needs, and we each have to develop it in our own way.”

– Prime Minister Lee Hsien Loong at

GovTech STACK Developer

Conference on 2 October 2018

Smart Nation is our national response

Slide courtesy of Smart Nation & Digital Government Office

2 PRINCIPLES

3 STAKEHOLDERS

6 OUTCOMES

6 STRATEGIES

Digital Government

Blueprint (2018-

2023):

SCAN TO ACCESS

Digital Government Blueprint

Slide courtesy of Smart Nation & Digital Government Office

Enable Smart Planning with Digitalisation: Delivering better planning outcomes

More integrated planning across

government

Enhance productivity

Harnessing Digital Technologies as an Enabler to achieve

Better Outcomes for our People and Businesses

3 Desired Outcomes

Obtain better planning insights

Smart Nation Sensor Platform (SNSP)

Sharing

Of Data

Traffic Light

Prioritisation

for Emergencies

Public

Notification

Service

EXAMPLES OF APPLICATIONSNETWORK OF SENSORS

National Digital

Identity

(NDI)E-Payments

Smart Nation

Sensor Platform

(SNSP)

Smart

Urban MobilityMoments of Life

National Digital

Identity

(NDI)E-Payments

Smart Nation

Sensor Platform

(SNSP)

Smart


Smart Nation Sensor Platform (SNSP)

Smart Urban Mobility

Empowering

commuters

Optimising

networks

On-demand

shared

transport

Self-driving

vehicles

DATA & ANALYTICSBUSINESS MODEL INNOVATION

NEW TECHNOLOGIES

National Digital

Identity

(NDI)E-Payments

Smart Nation

Sensor Platform

(SNSP)

Smart


Analytics for placement of amenities

Understanding home-work flows

Smart Planning Enables New Insights

S M A R T P L A N N I N G

Integrated Environmental Modeller (IEM)

3D Model

Bridging Gaps

Solar Irradiance Map

Wind MapAir Temperature Map

Noise Map

Slide courtesy of Housing & Development Board

S M A R T E S T A T E

SecurityStructural

HealthEnergy WasteWater

IrrigationWater Pumps

Solar PV LightingLifts

SMART HUB

Fault Monitoring Common Dashboards Big Data Analytics 3D Analytics

Collect Process Monitor Analyse Visualise

Smart Nation Sensor Platform(SNSP)

Agency Sensors


S M A R T C O M M U N I T Y

Telco DataMobile App

Sensor App Social Media

Informed Design Platform


Self-Driving Vehicles:the future of mobility?

Rethinking Mobility

3D printing transforms manufacturing and production chains

Robotics in manufacturing and services

Rethinking Manufacturing and Services

Punggol Creative Cluster Jurong Innovation District

New Spaces to Support the Future Economy

Planning for a Sustainable Singapore• Take a long-term view

• Adopt an integrated approach

• Support business needs

• Have an open, transparent system

• Be flexible and responsive

谢谢！

LearnLookLeapLove

Art Installation along Hindoo road at Little India. These ‘umbrella trees’ are designed by Ms MarthaliaBudiman as part of the Urban Redevelopment Authority’s ‘My Ideas for Public Spaces: Forgotten Spaces’ competition in 2015

GREATER BAY AREA CHINA

Raymond ChowHongkong Land Limited

10th October 2018

- Corporate Overview

• Founded in Hong Kong in 1889

• A listed leading property investment, management and development group

• Owns and manages more than 850,000 sq. m. of prime office and luxury retail property in key Asian cities, principally in Hong Kong, Singapore and Beijing

• Has a number of residential and mixed-use projects under development in cities across Greater China and Southeast Asia. In Singapore, its subsidiary, MCL Land, is a well-established residential developer

• Hongkong Land Holdings Limited is incorporated in Bermuda

• Standard listing on the London Stock Exchange

• Secondary listings in Bermuda and Singapore

• A member of the Jardine Matheson Group

• Operate a well-diversified portfolio of prime investment properties which it develops and holds

long-term investment, and develops premium residential and accompanying commercial properties

for sale

• Investment properties are predominately commercial in nature and located in central business

districts of Asian gateway cities, with a concentration in Hong Kong and Singapore

• Development properties are premium residential and accompanying commercial developments in

mainland China and Singapore, with a growing presence in Southeast Asia

- Investment Strategies

2017 Full Year - Key Figures

▪ Profit1: US$5,585m (2016: US$3,346m)

▪ Net debt: US$2.5bn (Dec 2016: US$2.0bn)

▪ NAV per share: US$15.63 (Dec 2016: US$13.30)

▪ Final dividend per share: US¢14 (1H 2017: US¢6)

- Financial Performance

US$970m US$36.8bnUnderlying profit Shareholders’ funds905

848

970

2015 2016 2017

29 31 37

Dec 2015 Dec 2016 Dec 2017+14% YoY +18% YoY

2017 Full Year - Highlights

▪ Underlying profit up 14% to a record US$970m

▪ Full-year dividend up 5%

▪ Net Asset Value per share up 18%

1 Attributable to Shareholders of the Company

• Hongkong Land is represented in over 19 cities

across China and Asia

• The Company is poised for even greater expansion

into new cities and countries across the region

in Asia

China

BostonChina

China

Beijing

Shanghai

– Guangdong

Guangdong

Greater Bay Area

– GBA

Greater Bay Area

56,000km2

68 million population

US$ 1.3 trillion GDP

Comparison

Greater Bay Area

56,000km2



Tokyo Bay Area

37,000km2



San Francisco

Bay Area

18,000km2

7.6 million population


New York

Bay Area

21,000km2



Greater Bay Area

9 cities

2 SARs

+

Hong Kong

Macao

Greater Bay Area

9 Cities 2 SARs+

Guangzhou

Shenzhen

Dongguan

Huizhou

Zhongshan

Jiangmen

Zhuhai

Zhaoqing

Foshan

Hong Kong

Macao

Greater Bay Area – Key Roles

Macau

Tourism &

Leisure hub

Hong Kong

International law &

dispute resolution

service center

International maritime

& regional logistics hub

Global offshore

Renminbi business

hub

Guangzhou

Transportation

hub

Political &

economic hub

Shenzhen

High-tech, R&D

& manufacturing

hub

Greater Bay Area – Advantages

Abundant land and human resources

Extensive financial know-how and multi-faceted economic system

Rapid development of innovation and technology industry

Well-developed infrastructure

Legal, tax, currency and identity differences within the GBA

Greater Bay Area – Connectivity

▪ Major airports

▪ Major ports & terminals

▪ Major expressways

▪ Major railways

Greater Bay Area – Connectivity

Hong Kong – Zhuhai – Macao Bridge A 29.6 km dual 3-lane carriageway in the form of bridge and tunnel(estimated to be launched in October 2018)

High Speed Rail (Hong Kong section)Connects with the over 25,000 km National High Speed Rail Network(launched in September 2018)

Shenzhen-Zhongshan BridgeConnects Shenzhen, Zhongshan and Guangzhou(estimated to be completed in 2021)

GBA – Real Estate Opportunities

Commercial real estate opportunities

700 sq. km. of development land is reserved under the 13th Five-Year Plan of the PRC Government

Guangzhou

23%

Dongguan 20%

Zhongshan 16%

Foshan 12%

Jiangmen 12%

Zhaoqing 5%

Huizhou 5%

Shenzhen 3% Zhuhai 3%Hong Kong +

Macau 1%

The distribution of reserved land in

the GBA in the 13th Five-Year Plan Area

GBA – Real Estate Opportunities

LeisureOffice Logistic

Greater Bay Area – Office

Office

Three leading cities are Hong Kong, Guangzhou and Shenzhen

Current total stock of prime office space is 23.24 mil sq. m.

Limited new supply of 4.75 mil sq. m. in next five years

Low vacancy of 5-10% (Guangzhou & Shenzhen) and sub-1% (Hong Kong)

Strong leasing demand from corporate occupiers

Investors purchase for self-use

Greater Bay Area – Logistic

Logistic

Air cargo volume of Hong Kong International Airport and Guangzhou

Baiyun Airport are among the top 20 globally

New infrastructure reduces traveling time between key ports

Rapid e-commerce growth boost the development of the region’s logistics

market

Emerging logistic hubs with 565,000 sq. m. site in Zhuhai Hongwan Port,

Zhongshan Cuiheng New Area Industrial Park and Jiangmen Heshan

Logistics Park

Greater Bay Area – Leisure

Leisure

Hong Kong, Macao and Zhuhai will form a tourism delta in GBA

Other cities in GBA will develop the cultural and sightseeing industries

Demand for integrated resorts, shopping malls, and conference and

exhibition facilities

Drive demand for retail and hospitality properties

THANKYOU!

Raymond ChowOffice

+852 2842 8428

Email

[email protected]

china/hong kong update · punggol creative cluster jurong innovation district new spaces to support...

Documents