Hong Kong Apartments for rent in Tuen Mun for HK$4,802 per square foot

Posted on 30 July, 2021 | By Property852

Grit pays off and results in a king’s ransom for the Tang family. The first phase of the East Asia Industrial Building was sold by the late Tang Shing-bor’s family for HK$2.24 billion to a mainland company. It represents the largest commercial property transaction of 2021 thus far. The Hong Kong property, located at Ho Tin Street No. 2 in Tuen Mun is just a three-minute walk to the Tuen Mun Station. The 15-story building which covers approximately 466,449 square feet, suggests a price of HK$4,802 per square foot.

The Tang family sold a commercial building last month, Ta Chuen Ping Street No. 57, in Kwai Chung, for HK$900 million, a paper loss of close to HK$200 million since its acquisition in 2019 for HK$1.1 billion. According to a local broker, the late Tang’s family, widely-known as the “Shop King,” sold the East Asia building, which has a tenant currently, to China Resources Logistics. Reportedly, the current lease was signed three years ago. The rental price is approximately HK$12 per square foot, an estimated HK$5.6 million monthly lease. The rent is likely to rise in the future since Hong Kong apartments for rent are expected to be in high demand.

In 2012, the family acquired a stake of 7l percent in the building for HK$508 million. Subsequently, they bought an additional 18 percent in 2016 for HK$238 million. Finally, in 2018, they purchased the remainder, for an approximate total investment of HK$900 million. The family netted a paper gain, excluding fees, of more than HK$1.3 billion, or 1.44 times their investment, after less than ten years of holding the property.

This profit came as prices for Hong Kong apartments for rent rose in June for the fourth consecutive month. However, some home prices remained flat. Analysts are expecting continued pressure on rents for Hong Kong apartments due to the persistent high unemployment rate.

The private domestic rental index was up 0.06 percent for the fourth consecutive month, but was down by 1.2 percent year-on-year. The rental index for the first half of 2021 rose by 0.7 percent over last year. Rents are closely related to the jobless rate and the economy, according to Thomas Lam, Executive Director of Knight Frank. He added that recent growth in rents for Hong Kong apartments was spurred on by the decreasing jobless rate and the SAR’s economic recovery.

Hong Kong Apartments for Rent

Conversely, rents are predicted to fall this year as a result of Hong Kong’s relatively high unemployment rate, Lam stated, indicating a low rental yield for 2021.

Average home prices this month, in comparison, were flat, after rising for five consecutive months. The private domestic price index remained the same as in May at 394.5. In the first half, the official index of home prices increased 3.84 percent from May 2020’s level. According to Lam, some purchasing power was digested from local buyers eager to purchase Hong Kong apartments since August prior to the 6,000 deals recorded by the secondary market in April, and also in May. Lam expects steady growth in local prices which, in the third quarter, will rise above the record, with developers eager to launch sales.

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