Various market forces have been conspiring over the past months to provide Notwithstanding the Government claimed that there is no room for relaxing the mass residential property market with mixed clues on its near term outlook. the demand-side management measures at this stage, while in reality genuine In fact, the onslaught of the COVID-19 epidemic corresponding with worsen economic situation have been part and parcel of the business home buyers are continuing to be hurt with the restrictive mortgage lending scene from one degree to another for the past fourteen months, while sustained policies with prospective willing end-user buyers are finding the task of financing sensitivity to those issues could always be expected to continuing exert pressure those secondary units even more difficult. Having said that, for statistical and on and affect sentiment in local residential property sector. comparison reference by looking at the total value of new loans approved However, despite the year beginning with austere global and local economic compared to total sales volume of flats in the secondary property market over conditions as well as obvious discord on perceived China-US tension, sentiment the past four years (see table). For example, the average loan value as per in the luxury sector has managed to gradually improve. For instance, the each transaction in 2019 was $5.05 million had substantially increased to $6.53 recent tender result of residential land indicated that developers are still million in 2020, representing an increment of 29%. In short, while flat prices optimistic towards the future prospect of this sub-sector. The two low-density luxury residential plots in The Peak were sold in December 2020 and February have soared and remained at high levels, value of new loans approved per 2021 for a stunning $12 billion and $7.25 billion, yielding an accommodation transaction on average edged up correspondingly during the period. value of $46,272 p.s.f. and $50,010 p.s.f. respectively. The results are regarded as a barometer of developers' prevailing sentiment as well as a guide to the Total sales volume Total value of new loans approved Average loan value Year of secondary flat of Secondary market ($Mil) per transaction ($) general market directions. This aside, the market for new luxurious residential 2017 42,946 $194,512 $4,529,223 properties also started to take flight at an encouraging level, with prices over 41,614 $217,068 $5,216,225 $80,000 p.s.f. for luxury flats quickly witnessed in late January and February 2018 in a number of development primary sales in , seemingly 2019 38,689 $195,466 $5,052,237 highlighting the shortage of rare luxury residential properties available in 2020 44,563 $291,389 $6,538,810 Sources: Hong Kong Monetary Authority & The Land Registry the market. This perhaps is the best case scenario in terms of the integrity For reference only. and substance of the market recovery, at least in this sub-sector. On the other hand, notwithstanding market sentiment was swayed by theHKMA has amended the maximum property value eligible for mortgage loan local epidemic situation since last year, in reality the second-hand market has up to 80% and 90% loan to value (LTV) ratio is $10 million and $8 million already undergone a rather prolonged consolidation period, while there have respectively in October 2019 in order to provide assistance to home buyers not been definite signs of any major rebound particularly in terms of transaction activity since the imposition of blanket mortgage ceiling restrictions as well with immediate housing needs. Yet the effect in the upper end market has been as the demand-side management measures such as AVD currently in place. minimal since home purchasers have conspicuously been local wealthy class, In fact, certain category of home buyers are still restrained, as evidenced by PRC based companies as well as consortium who do not depend on financial the dearth of sale transactions in the secondary market over the past ten years. assistance from banks. In view of the price levels of second-hand units, buyers The number of transactions, for instance in terms of the total number of sale of middle to lower income group are artificially restrained. The recent amendments and purchase agreements for second-hand residential property received by of LTV ratio perhaps will benefit the purchasers of relatively large size second- the Land Registry, was 44,563 in 2020, increased by around 15% from 2019. hand flats in non-urban areas while in reality, even the recent transacted price However, for statistical reference, the sales volume registered in 2020 was of a 500N sq.ft. unit in Liberte, West Kowloon is in excess of $9 million. substantially dropped by approximately 64% when compared to 2010 when the new SSD measure was imposed. In fact, basket of stringent measures were With economic slow down and wage stagnation currently evident, overly proven to suppress market activity while the relative inactivity in the secondary funding is inadvisable. However, a more realistic LTV benchmark should be market has not seen reasonable price adjustment alongside. In reality, tangible buying demand is comparatively strong in the primary sector as evidenced reconsidered to facilitate at least the further easing of the mortgage ceiling by the excellent and consistent developer sale successes over the past years. restrictions in order to reflect current day's market situation, and there would This does endorse the view that the market has shown supposedly intended also be less pressure on end-user buyers to over-gear themselves by rushing effects, with transaction volume perpetually capped while flat prices have still after new properties, while in essence, parallelly activating the trading volume more than double that in 2010 notwithstanding some modest fluctuations in in the secondary market. individual years. Transacted Volumes of Seconday Residential Units & Price Movement of Residential In general, in accordance to the Government's forecasts, the local economy Property Class C During 2010 to 2020 is expected to resume growth in 2021, but the pace and strength of the recovery 400 140,000 is subject to the high uncertainty associated with the epidemic. However, if 350 120,000 the local vaccination program can yield the intended results, there should be 300 100,000 a more solid and significant recovery of domestic economic activities in the 250 80,000 latter half of the year. Projecting forward, it seems entirely sensible to suggest 200 60,000 that should market conditions be deemed to have stabilized, the Government 150 should not only to moderate its restrictive policies while continuing to

Price Index (1999=100) 40,000 Transacted Volume 100 curb speculations, but also to implement 50 20,000 multi-pronged strategies to increase land 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 supply for the benefit of longer term Sources : Rating & Valuation Dept & The Land Registry Year No. of transactions of secondary residential units For reference only. Price Index - Residential Class C market stability.

Unit 2701, 27/F, The Center, 99 Queen's Road Central, Hong Kong. Tel: (852) 2521-6467 Fax: (852) 2845-2642 Web site : www.agwilkinson.com E-mail: [email protected] The residential market during December 2020 to February 2021 has effectively Relative steady second-hand market entered into a renewed state of consolidation as the market sentiment was swayed by the 4th wave of COVID-19 pandemic. However, there has been no evidence In the wake of macro-prudential measures for residential property mortgage of a noticeable decrease in the volume of transactions in both the primary and lending currently still in force has continued to hinder potential and interested buyers from scrambling for second-hand residential premises. In reality, certain second-hand sectors. With reference to Government's statistics, the volume of new number of first time home-purchasers whom withheld their purchase plans in the and second-hand residential transactions during the months from December 2020 beginning of last year have generally been absorbed by the primary market over to February 2021 was around 4.8% and 4.3% respectively more than the number the past couple of months. According to our compiled statistics, the number of of transactions registered during the preceding three months' period. transaction figures in urban areas increased by less than 1% while in non-urban areas recorded a modest decrease of 2% during the aforesaid comparison period. Limited number of primary sales However, the broadly steady turnover showing has not been corresponding with any noticeable adjustment in prices. Since the 4th wave of epidemic situation in The primary residential sales market underwent new round of consolidation amid late November last year, average prices of secondary residential property in urban a fourth Covid-19 pandemic wave hitting the market in late November. In accordance as well as non-urban areas during the months from December 2020 to February to our compiled statistics, the accumulated number of primary residential transactions 2021 have remained firm when compared to preceding three months' period as in urban areas during the aforesaid comparable period increased by 122% while flats in the large size units were observed to have achieved a relatively better in non-urban areas decreased by 47% as compared to preceding three months' performance overall than small size units during the comparison period. period. In reality, other than genuine end-user demand driven activity, there has been some individual long term investment interest. Price Trend and No. of Transactions Analysis for the Secondary Residential Market in Urban & Non-Urban Areas No. of Transactions Analysis for the Primary Residential Market 3,500 20,000 18,000 in Urban & Non-Urban Areas 3,000 16,000 2400 2,500 14,000

2000 2,000 12,000 10,000 ($/sq.ft.) 1600 1,500 8,000 1,000 6,000 Average Transacted Price 1200 Number of Transactions 4,000 500 2,000 800 0 0 Number of Transactions 3/20 4/20 5/20 6/20 7/20 8/20 9/20 10/20 11/20 12/20 1/21 2/21 400 Month / Year Number of Transactions (Urban) Number of Transactions (Non-Urban) 0 Average Transacted Price (Urban) Average Transacted Price (Non-Urban) 3/20 4/20 5/20 6/20 7/20 8/20 9/20 10/20 11/20 12/20 1/21 2/21 Month / Year Number of Transactions (Urban) Number of Transactions (Non-Urban) Signs of rebound in luxury market There have been signs of increasing buying activity which contribute to part of In reality, one notable characteristic of the market strategy by developers is recent rise in the number of transactions with some end-users from Mainland that they have adopted a piecemeal approach for their initial “attractive” pricing China as well as local long term investors alike entering the market since the sales scheme with several tens of unit in one phase to push into the market at one end of last year. This aside, in accordance to our compiled records, transacted time, nil or marginal increase in price for following phases at short interval. prices of selected luxury buildings have seen mixed movement. For instance, whilst prices of Tregunter recorded an increase of approximately 9%, Typical sales schemes have also included flexible payment terms, tax concession edged down by around 5%. plans as well as top-up financing to relieve the banks' restrictive mortgage policy. As such, successful sales of new developments such as The Campton in Cheung On the other hand, rents are highly sensitive to prevailing economic as well as Sha Wan and Lohas Park Phase 10 which not only stimulated the primary market demand conditions in the luxury property market. Over the months from December in general, but also underlined the high level of demand for new and modern last year to February, luxury apartments have shown a relatively downward trend residential units. and our compiled statistics showed that rentals for traditional luxury flats have decreased within 1% to as high as 14% during the period. For instance, while Meanwhile, developers are still positive and optimistic towards the future prospect effective rent of Hillsborough Court in Mid-Level Central has demonstrated a of the residential sector, as reflected by the latest tender results of residential land decrease of approximately 5%, transacted rentals of Hong Kong Parkview in in prime districts. For instance, two parcels of residential land in Mansfield Road, Island South have edged down by around 8%. the Peak were sold at A/V of $46,272/sq.ft. and $50,010/sq.ft. in last December The Performance of Luxury Residential Market During Sep 20 - Feb 21 and February respectively with positive market feedback serving to boost market Transacted Price ($psf) Rental ($psf) Yields (%) confidence particularly in the luxury residential sector. Buildings Sep - Nov 20 Dec 20 - Feb 21 % Change Sep - Nov 20 Dec 20 - Feb 21 % Change Sep - Nov 20 Dec 20 - Feb 21 % Change MID-LEVEL CENTRAL Prices seen no significant movement in selected popular housing estates Tregunter 24,508 26,773 9.2% 46.7 44.3 -5.1% 2.3 2.0 -13.0% Hillsborough Court 26,032 27,706 6.4% 50.7 48.3 -4.7% 2.3 2.1 -8.7% Clovelly Court N.A. N.A. N.A. 50.7 50.0 -1.3% N.A. N.A. N.A. According to our records, there has no significant price movement for our Dynasty Court N.A. 38,498 N.A. 56.0 54.3 -3.0% N.A. 1.7 N.A. analyzed popular private housing estates, namely , , MID-LEVEL EAST / HAPPY VALLEY South Horizon, , , Sceneway Garden, Cavendish Heights 30,108 N.A. N.A. 46.3 45.0 -2.9% 1.8 N.A. N.A. Caribbean Coast, Shatin, Lohas Park and Metro Harbourview over the The Legend 25,353 24,072 -5.1% 53.7 51.7 -3.7% 2.5 2.6 4.0% past three months' period. Among these popular housing estates, Caribbean Coast Leighton Hill 44,940 43,368 -3.5% 60.7 60.3 -0.6% 1.6 1.7 6.2% Beverly Hill 24,713 26,176 5.9% 33.7 29.0 -13.9% 1.6 1.3 -18.8% recorded modest average price rise, translating from $11,020 per sq. ft. to $11,260 HONG KONG SOUTH per sq. ft., representing a surge of approximately 2% during the aforesaid comparable Marinella (Apartment) 31,982 N.A. N.A. 53.7 51.0 -5.0% 2.0 N.A. N.A. period. However, for instance there was marginal price drop of merely 1% for Residence Bel-Air (Apartment) 26,121 26,982 3.3% 52.7 51.3 -2.6% 2.4 2.3 -4.2% Mei Foo Sun Chuen as well as Sceneway Garden. (Apartment) 24,287 27,866 14.7% 46.7 43.0 -7.9% 2.3 1.9 -17.4% Hong Kong Parkview 27,460 26,187 -4.6% 47.7 44.0 -7.7% 2.1 2.0 -4.8% The Performance of Selected Popular Housing Estates During Sep 20 - Feb 21 For reference only. Average Transacted Price ($psf) Average Rental ($psf) Yields (%) Market prospect Estates % Change % Change Sep - Nov 20 Dec 20 - Feb 21 Sep - Nov 20 Dec 20 - Feb 21 Sep - Nov 20 Dec 20 - Feb 21 At this point, there appears to be reasonable consensus that the performance Caribbean Coast 11,020 11,260 2.2% 24.5 25.0 2.0% 2.7 2.7 of the mass residential property market will depend on bearings of certain crucial City One Shatin 17,002 17,031 0.2% 38.0 37.0 -2.6% 2.7 2.6 factors in 2021. Firstly, the progress of effective vaccines for use. Secondly, Heng Fa Chuen 16,256 16,206 -0.3% 35.5 34.5 -2.8% 2.6 2.6 Government's policies toward bank mortgage lending ceilings. Thirdly, the speed Lohas Park 13,490 14,767 9.5% 23.5 25.0 6.4% 2.1 2.0 and recovery strength of the global and local economy. Finally, concern on the Mei Foo Sun Chuen 13,654 13,487 -1.2% 32.0 31.5 -1.6% 2.8 2.8 direction of prime lending rate. Metro Harbourview 18,521 18,500 -0.1% 40.5 40.0 -1.2% 2.6 2.6 Sceneway Garden 14,891 14,713 -1.2% 32.0 31.0 -3.1% 2.6 2.5 All in all, although we do expect a more positive perception of residential market 16,528 16,508 -0.1% 36.0 36.0 0.0% 2.6 2.6 as plenty of buyers are still seeking to purchase their own apartments, nonetheless Taikoo Shing 18,948 18,858 -0.5% 40.5 38.5 -4.9% 2.6 2.4 as primary markets are pitched progressively higher, the affordability of potential Whampoa Garden buyers particularly in the second-hand market will be continuously tested and 16,376 16,542 1.0% 35.5 34.5 -2.8% 2.6 2.5 as such, combined with other prevailing negative attributes, the market may For reference only. experience some further consolidation periods towards the months ahead. The property market's sentiment was hard hit by waves of COVID-19 epidemic This aside, there is visible tendency that more major tenants are looking for prime since early 2020. Nonetheless, the relaxation of the macro-prudential measures office units in other established business areas because of the awareness of for mortgage loans on non-residential properties in August and the abolishment significantly cost savings achievable. In reality, the rapid “decentralization” of Double Ad Valorem Stamp Duty (DSD) in last November rendered some support to this sector. Our compiled analysis indicated that overall transaction volume process prevailing during last couple of years has been fuelled by increasing increased by 79%, translating from 173 deals to 310 deals during December 2020 number of multinational corporations electing to trim part or all of their operations to February when compared to the preceding three months' period, and in particular, to other emerging business districts. For instance, recent market news revealed sales volume of office premises involving purchase price of under $50 million that an international bank moved out approximately 60,000 sq.ft. of office space surged from 160 deals to 303 deals over the same comparison period. in Standard Chartered Bank Building while a renowned France based investment bank considered to scale down 23,000 sq.ft. of office space in Two IFC. Number of Office Transactions Analysis during Mar 2020 - Feb 2021

190 Modest improvement in sales of Grade B office premises 180 170 160 150 With the abolition of ad valorem stamp duty on commercial properties in last 140 130 November, transaction activity picked up gradually as availability of reasonably 120 110 priced quality Grade B office stock in traditional business districts increased. 100 Nonetheless, as market sentiment is still dampened by the economic fallout of the 90 80 pandemic, landlords are at present under substantial pressure to reduce asking 70 60 prices in order to meet buyers expectation due to shrinkage in demand partly 50

Number of Transactions brought by the continuing tendency to decentralize business operations. 40 30 20 With market prices now firmly on a downward track, there will likely be a 10 0 corresponding “knock-on” effect towards the overall office market given the 3/20 4/20 5/20 6/20 7/20 8/20 9/20 10/20 11/20 12/20 1/21 2/21 inability of the market to absorb the on-stream new supply at least in the short Month / Year term. According to our compiled statistics, average unit prices of office units in our analyzed districts such as Central/Sheung Wan, North Point, Wanchai/Causeway Under $50 Million Over $50 Million Bay and Tsim Sha Tsui/Jordan decreased within 4% to 6% during December 2020 Thin activity in prime office sector to February when compared to preceding three months’ period. Sales turnover of Grade A office sector displayed no improvement in recent months, due to current economic outlook remains pessimistic and weakened Price Trend for Major Grade B Offices in Selected Districts business environment, as well as worsening leasing demand of primes office premises in core business districts. In recent months, a noticeable feature has been 17000 the continued off-loading of office floors by vendors and/or investors into the 16000 market but a corresponding lower volume of successful transactions. Given the sustained low levels of sales activities within the prime office sector, latest achieved 15000 transaction prices have been observed to fall below initial asking prices. In 14000 accordance to our records, subdivided office units in Lippo Centre and Shun Tak Centre were sold for $25,943 per sq.ft. and $33,044 per sq.ft. respectively during 13000 December 2020 to February 2021. 12000 Price Trend for Major Grade A Offices in Hong Kong Island & Kowloon 11000 10000 3/20 4/20 5/20 6/20 7/20 8/20 9/20 10/20 11/20 12/20 1/21 2/21 45000 Average Transacted Price ($psf)

40000 Month / Year

35000 Grade B offices in Causeway Bay / Wanchai Grade B offices in Tsim Sha Tsui / Jordan Grade B offices in Mong Kok Grade B offices in Central & Sheung Wan 30000 25000 This aside, the Rating and Valuation Department recorded vacancy rates of Grade 20000 B office stock increased from 9.7% in 2019 to 11.9% in 2020, translating from 2.93 mil. sq.ft. to 3.65 mil sq.ft. respectively. With current comparatively dented 15000 Average Transacted Price ($psf) market sentiment, the gradual increase in vacancy rates is bound to at least curtail 10000 any prospect of rebound of activity within this sector in the near term. Nonetheless, 3/20 4/20 5/20 6/20 7/20 8/20 9/20 10/20 11/20 12/20 1/21 2/21 it is noticeable that the rate of absorption for medium to large prime office Month / Year accommodation in less strategic locations was encouraging as the rental margin Grade A offices in Hong Kong Island Grade A offices in Kowloon between different quality has narrowed considerably of late. For instance, referring to market information, an international courier company leased approximately The current situation in the leasing market is considerably worse than the sales 100,000 sq.ft. of office floors of International Trade Tower in Kowloon East. market. In according to The Rating and Valuation Department’s preliminary figures, vacancy rates of Grade A office space rose from 9% in 2019 to 11.8% in 2020, An analysis of large scale transactions over recent months indicated significantly translating from 7.75 mil. sq. ft. to 10.27 mil. sq.ft. respectively. In fact, selected decreased activity particularly of prime office accommodation. In accordance to prime office rents over past couple of months have dropped in some cases by up our compiled records, for instance, en-bloc of SML Tower changed hand for $1.442 to as much as 20% due to increase in supply of available office units and billion in December, and 16/F. of brand-new office building “888 Lai Chi Kok progressively competitive letting packages offered by landlords. For instance, average rental of Shun Tak Centre and Far East Finance Centre declined by 4.1% Road” transacted for $340.22 million in January. and 3.5% respectively during the aforesaid comparable period. Market prospect The Performance of Selected Prime Offices During Sep 20 - Feb 21 Buildings Transacted Price ($psf) Rental ($psf) In general, on the downside, the ongoing development of the local COVID-19 Sep - Nov 20 Dec 20 - Feb 21 % Change Sep - Nov 20 Dec 20 - Feb 21 % Change situation corresponding with highly uncertain economic outlook will continue to 9 Queen's Road Central N.A. N.A. N.A. 70.0 68.0 -2.9% affect market sentiment at least towards the end of 2Q. On the other side, barring Admiralty Centre 28,500 N.A. N.A. 38.0 37.0 -2.6% Convention Plaza N.A. N.A. N.A. 46.0 46.0 0.0% any unforeseen turmoil, the local economy is forecast to rebound during the second Far East Finance Centre 22,000 N.A. N.A. 57.0 55.0 -3.5% half of current year, while in the face of current interest rates still maintain in King Palace Plaza (K.T.) N.A. 9,500 N.A. 21.0 22.0 4.8% low levels, and investors have had time to re-adjust their property portfolios in Lippo Centre 23,333 25,943 11.2% 38.0 37.0 -2.6% response to the changed investment environment, we do take the view that the Rykadan Capital Tower N.A. N.A. N.A. 27.0 24.0 -11.1% office property market seems to react positively as soon as a more stable economic Shun Tak Centre N.A. 33,044 N.A. 49.0 47.0 -4.1% and public health condition becomes more evident. For reference only. Subject to Land Registry and others Hong Kong Tourism Board released that the overall tourism arrivals to Hong Transacted Consideration for All Retail Premises in Selected Kong dropped to 5,495 in February, representing a drastic decrease of approximately Districts during Mar 20 - Feb 21 97.2% compared with the same month in 2020. With travel restrictions still in 350 force, inbound tourism remained frozen. In fact, arrivals from Mainland China dropped significantly in the same month, while total number of visitors from short 300 haul markets also displayed noticeable contraction in Hong Kong's inbound 250 tourism, indicating a drastic drop of approximately 98.1% over the same month in 2020. On the other hand, average occupancy rate across all categories of hotels 200 in February was 52%, representing a 2% increase when compared to January. 150 According to Census and Statistics Department, the value of total retail sales in February was estimated at $29.5 billion, increased by 30% over a year earlier. 100

50

Overall activity remained inactive Total Transacted Consideration ($/mil) 0 3/20 4/20 5/20 6/20 7/20 8/20 9/20 10/20 11/20 12/20 1/21 2/21 As local consumption activities were severely disrupted by the COVID-19 Month / Year epidemic, overall retail property market activity continued to remain inactive amid Wanchai / Causeway Bay Mong Kok Tsim Sha Tsui austere business environment and weak investment sentiment. Due to the fact that the prices of selected retail premises have suffered a cumulative slump of as much as 30% to 40%, cautious landlords have continued to unload their properties into Number of Transactions for Shop Premises sold over $50 million in the market for sale with discounted prices in order to minimize the effect of further Five Major Core Districts during Dec 20 - Feb 21 price fluctuation against the backdrop of the low end-user demand. This has resulted in some drastic price decreases of individual retail accommodation amounted to up to half of the prices compared to their peaks. Causeway Bay (2) Mong Kok (2) In accordance to our compiled statistics, the total number of transactions of retail premises recorded a modest increase of approximately 15% during December 2020 to February 2021 when compared to preceding three months' period. In particular, based on our data, the sales activity of retail accommodation involving purchase prices of over $50 million surged by approximately 86% during the aforesaid comparison period. Yau Ma Tei (1) Wan Chai (2) Number of Shop Transactions Analysis during Mar 20 - Feb 21 Tsim Sha Tsui (2) 160 140 Large scale deals surged 120

100 On the other hand, an analysis of large scale completed transactions over the past three months' period reflected a relatively active activity particularly of retail 80 properties in non-core shopping areas across different districts. For example, 60 noticeable deals included Unit 101-102 on 1/FL., Grandeur Shopping Plaza in Tin Shui Road and 1/FL. of Sai Kung Garden Arcade in Sai Kung were sold for

Number of Transactions 40 $105 million and $400 million respectively.

20 Selected Sizable Shop Transactions During Dec 20 - Feb 21 0 3/20 4/20 5/20 6/20 7/20 8/20 9/20 10/20 11/20 12/20 1/21 2/21 Transaction (Net Area) (Net Area) Transaction / Gross Floor Area / Gross Floor Area Properties Amount ($/Mil.) Month Month / Year (sq.ft.) ($/sq.ft.) 1/F. & entrance on G/F., Sai Kung Garden, No.16 Chan Man Street, Sai Kung. $400.00 28,439 $14,065 01/21 Under $50 Million Over $50 Million Whole of Care & Services Elderly Home(Tai Wai), Nos.60-68 Chik Chuen Street, Sha Tin. $205.00 N.A. N.A. 01/21# lthough we have seen a slight improvement in volume of transactions during Shop A on G/F., Billionnaire Avant, No.62 Nga Tsin Long Road, Kowloon City. $130.00 4,321 $30,086 12/20# A Shop 15 on G/F. & 1/F., Pao Woo Mansion, the past three months' period, it has however, been noticeable that effective rents Nos.177-179 Wan Chai Road, Wan Chai. $115.00 11,900 $9,664 01/21* were significantly lower compared to the same period during last couple of years. Shop 101 & 102 on 1/F., Grandeur Terrace Shopping Arcade, $105.00 9,296 $11,295 01/21 In reality, demand for rental accommodation currently offered in the market No.88 Tin Shui Road, Tin Shui Wai. Shop No.642 on G/F. & M/F., Toa Tak Building, particularly in traditional shopping districts has remained relatively soft. This Nos.642-646 Nathan Road, Mong Kok. $93.80 N.A. N.A. 02/21* does endorse the view that the growth in demand for rental space has been Shop A on UG/F. & Storage A on CL/F., Au's Building, $93.00 N.A. N.A. 12/20 noticeably lagged behind the substantial supply generated from the “consolidated” Nos.15-19 Hollywood Road, Central. market. Since the overall rate of absorption has further slackened despite discounted Shop A on G/F., Cammer Commercial Building, Nos.30-32 Cameron Road, Tsim Sha Tsui. $87.88 1,878 $46,795 02/21 rents, as such, further anticipated increases in vacancy rates of retail stock are Shop 4 on G/F., Chung On Building, Nos.297-313 Sha Tsui Road, Tsuen Wan. $83.99 (1,325) $63,389 02/21 therefore expected to continue to exert additional pressure on rents at least in the Shop B on G/F., Howard Building, Nos.42-44 Hankow Road, Tsim Sha Tsui. $83.80 N.A. N.A. 01/21 near term. # Subject to confirmation / *P-ASP Subject to Land Registry records. Consideration increases For reference only. Market prospect On the other hand, the overall transacted consideration for overall sales of retail premises in Wanchai/Causeway Bay, Mongkok and Tsimshatsui increased by Amid the outbreak of the COVID-19 pandemic, the local economy recorded approximately 43% during December 2020 to February 2021 when compared to contraction for the second consecutive year in 2020. In accordance to the preceding three months' period. It was evident that among the analyzed districts, Government's information, private consumption expenditure recorded the steepest Mongkok in particular recorded an increase of 38% while Wanchai/Causeway ever annual decline, while job and income conditions worsened and inbound Bay recorded a drastic surge of approximately 1.2 times. Moreover, in accordance tourism almost came to a halt, hence dampened investment incentives in this sector. with our records, the total number of retail property transactions with over $50 Besides, since latest achieved transaction prices have been observed to fall below million in five analyzed districts, namely Mongkok, Yau Ma Tei, Tsimshatsui, asking prices in certain number of cases, and also in view of weak end-user demand Wanchai and Causeway Bay recorded a total of 9 successful deals respectively support, we do envisage that investors will continue to adopt a more cautious approach towards purchasing commitments at least in the short term. during the aforesaid comparison period.