Housing | Many investor-owned properties remain empty

“The Fountainside” is located close to the Lilau Square and Mandarin House

Property owners with a solid financial status prefer to keep properties empty than to rent them lower than the asking price, according to what several experts have told the Times. This explains why so many investor-owned properties, particularly the high-­end ones, lie empty or have low occupancy.
Jeff Wong, head of residential at Jones Lang LaSalle (JLL) notes that high-end real estate investors usually have a stable financial situation and “feel no pressure to sell the properties they are holding.” “Real estate is still a profitable market,” he says, adding that it is “a very simple and a very secure way to invest.”
Contributing to the slowdown in the local property market is also the “increase of supply registered in the last few years, together with a decrease on the demand,” Wong told the Times. The JLL executive hopes to see improvements in business volume in the second quarter of 2017, with the developments of the new gaming resorts in Cotai area.
According to Wong, some of the factors that come into play in Macau are the stabilization of the number of overseas workers, as well as a change of the profile of these workers, and the registered reduction on the activity of some sectors that would normally support the occupation of high-end and luxury properties, such as junkets. “The structural change of the casino industry tends to affect the occupation on some of these luxury market properties,” Wong explained, adding that in the near future, JLL expects an increase in demand on the market, driven “mostly by people working in the hotel industry, retail and food and beverage,” that generally opt for less expensive solutions.
Nevertheless for the property expert, “to invest in that kind of real estate [high-end] is still a good business especially for people entering on first of two phases since is still possible to achieve earnings of about 40 percent,” Jeff Wong concluded.
Daniel Lam from Bela Vista Property Services Limited, a property service company promoting and managing several high-end market properties, told the Times about one of the company’s most recent developments – “The Fountainside” – saying “it’s mostly sold, I would say somewhere in between 70 to 80 percent.”
The property owned by Sniper Capital Limited is located in Macau peninsula at the side of Lilau Square and Mandarin House. It features 38 apartments and four villas. Despite the apparent lack of occupation of some units in the property, Lam claims that “29 or 30 of its units” are occupied either by their owners or by tenants.” Lam added that the company does not have any current plans for “promotional activity to sell the remaining units,” preferring instead to wait for “a more favorable moment.”
Developments like “One Penha Hill” seem to be ready to lodge new owners, while others are still waiting for better days-­like the case of the “Peak,” a large development built in Taipa island which remains with a uncertain destiny.
The residential development located in Ocean Gardens, is still surrounded with uncertainty, as it is a project that was originally started in the early 1990’s during the Portuguese administration with the intention of being a 10-storey hotel.
In fact, several changes to the project lead to an increase of the property area to three towers of 41-stories each under the mandate of the Secretary for Transport and Public Works Ao Man Long, who was later arrested on graft charges.
As the project is still involved in a corruption case, it remains unused although fully built.
In fact there are other buildings that seem to be vacant although developers state that they are occupied in full. Flats in “Oscar Crescent,” which is to be built at the edge of Taipa’s Jockey Club, have already been reserved with an initial deposit of HKD500,000. The project is expected to have 300 units and be completed by 2018.
“Oscar Crescent” is expected to generate “tremendous revenue” once several developments and facilities that are currently under construction are finished. This claim was supported by the fact that the upcoming Hong Kong–Zhuhai–Macau Bridge, Macau Light Rail Transit (LRT), and the development of new hotels in Cotai, according with the same promoter figures, will bring around 45,000 new people to live in that area.

Developments like “One Penha Hill” (pictured) seem to be ready to lodge new owners