British investment firm optimistic on local property market

UK-based investment firm Macau Property Opportunities Fund has released its financial statement for the fourth quarter of the 2017 fiscal year, including an assessment of the local property market and the fund’s predictions for 2018.

In the financial statement, the fund said it was “hopeful that Macau’s VIP gaming segment will recover further which will facilitate the continued recovery of rental values and improve occupancy rates.”

The city’s property market correlates strongly with the health of the gaming sector.

Macau’s gross gaming revenue last year amounted to about MOP265.7 billion (approximately USD33 billion), up 19.1 percent when compared to 2016. Constituting more than 85 percent of Macau’s economy, the growth in GGR propelled gross domestic product growth much further than International Monetary Fund forecasts, which had predicted a 13.4 percent annual increase.

The strong posting has already led to a significant increase in residential property prices in the post-recession landscape.

Accounting for both luxury and economy apartments, the average transaction price of residential units in Macau surged by more than 32 percent year-on-year in the second quarter of 2017, according to the Statistics and Census Service. That growth was slightly moderated by November 2017, standing 21 percent higher than in the same month the previous year.

Macau Property Opportunities Fund noted that small-size apartments are “more saleable in the current market” because “they are generally not subject to the mortgage loan cap.” Consequently, some properties, like The Fountainside near Lilau Square, are considering reconfiguring existing apartments into multiple small units.

Pointing to the impending opening of the Hong Kong- Zhuhai-Macau Bridge in 2018, the firm expects an influx of additional foreign labor in future, leading to a rise in demand for accommodation in the leasing market and long-term growth in residential property prices.

Established in 2006, Macau Property Opportunities Fund claims to be the only quoted property fund dedicated to investing in Macau. Its current portfolio comprises a mix of prime residential and retail property assets that were valued at USD436.2 million (about MOP3.52 billion), as at end-September 2017, the report noted. DB