Growing Need for Resilient Buildings
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P2 Wednesday, July 15, 2020 PROPERTY CONCRETE ANALYSIS ON THE MARKET FACTS & FIGURES Latest residential transactions Age Area Price Sq ft District Estate (years) (sq ft) (HK$m) (HK$) HONG KONG GROWING Mid-Levels Clovelly Court 26 1562 51.00 32,650 Wan Chai Convention Plaza Apts 31 619 19.00 30,695 Tai Hang Cavendish Heights 34 1439 43.80 30,438 North Point City Garden 38-34 988 16.00 16,194 Quarry Bay Taikoo Shing 33-42 689 12.28 17,823 NEED FOR Heng Fa Chuen Heng Fa Chuen 31-34 600 9.55 15,917 Apleichau South Horizons 25-28 863 18.50 21,437 Kennedy Town University Heights 24 401 8.58 21,397 Pok Fu Lam Chi Fu Fa Yuen 39-42 588 7.98 13,571 Happy Valley Beverly Hill 32 1057 26.80 25,355 RESILIENT Aberdeen Aberdeen Ctr. 38-41 451 6.18 13,703 Tai Tam The Redhill Peninsula 28-30 2450 75.00 30,612 KOWLOON Cheung Sha Wan Manor Centre 34 322 5.15 15,994 Tai Kok Tsui Cosmopolitan Estate 44-46 320 4.13 12,906 BUILDINGS Lai Chi Kok Mei Foo Sun Chuen 42-52 467 6.52 13,961 Yau Ma Tei Prosperous Garden 25-29 478 8.00 16,736 Kowloon Tong Beverly Villa 40 1211 17.30 14,286 Disasters, infectious disease and economic Yau Yat Chuen Village Garden 25 805 17.88 22,211 Hung Hom Whampoa Garden 29-35 505 8.95 17,723 pressure have put a greater focus on both a Wong Tai Sin Tin Ma Court (HOS) 33 351 5.00 14,245 To Kwa Wan Wyler Garden 41-42 335 5.30 15,821 building’s attributes and property management Lam Tim Laguna City 27-30 522 7.90 15,134 Kowloon Bay Richland Garden 35 447 5.75 12,864 Homantin,King's Park Chun Man Court (HOS) 39-40 519 7.17 13,815 undergoes digital transformation, Edward Farrelly Waterloo Hill,Perth St Perth Garden 40 994 17.30 17,404 [email protected] cybersecurity should be viewed as NEW TERRITORIES a key enabler of growth. Occu- Kwai Chung Wonderland Villas 34-36 813 9.90 12,177 piers are demanding more from Tsing Yi Greenfield Garden 30-31 495 7.55 15,253 As real estate adapts to immense their space. A flight to quality will Tsuen Wan Luk Yeung Sun Chuen 36-37 445 7.35 16,517 change, it may be pertinent to emerge from this disruption as Tung Chung Seaview Crescent 17-18 568 7.68 13,521 Castle Peak Road Hong Kong Gold Coast 28-30 576 7.37 12,792 look back at what has happened, companies opt for offices that aid Tin Shui Wai Kingswood Villas 24-29 1002 10.20 10,180 to prepare ourselves for what may greater productivity and serve to Tuen Mun Siu Hong Court (HOS) 36-38 493 5.04 10,219 come. attract and retain the best talent. Yuen Long Palm Springs 26-27 1198 13.30 11,102 Real estate owners today, Resilient buildings, in the Sha Tin New Town Plaza 29 578 9.44 16,332 grappling with falling revenues, broadest terms, covering all risks, Ma On Shan Sunshine City 26-27 369 6.32 17,122 are under intense pressure to both operationally and physically, Tai Po Parc Versailles 24 1005 10.00 9,950 contain costs and budgets have will be in greater demand and Kam Fai Mansion, Lam Tsuen River North Tai Po Centre 33-35 361 5.70 15,789 Fan Ling Flora Plaza 25 526 6.63 12,605 come under extra scrutiny. command the highest values. Mid-Levels Sheung Shui Sheung Shui Centre 27 342 5.20 15,205 However, rather than an However, can risks be foreseen On offer is a 1,254 sq ft Source: Centaline Property Agency, based on preliminary sale and purchase agreements arbitrary implementation of cost to increase preparedness and flat with one bedroom, a containment plans, property make assets more resilient? study, one bathroom and owners are advised to manage the The World Economic Forum one covered car parking Prime office indicative rents total cost of risk and identify cost Global Risks Report for 2019 space. The unit is on a high Prime office asking rents (HK$ per sq ft) – as of end June 2020 savings from a risk management highlighted the increased floor of the 58-year-old perspective. frequency of disease outbreaks, building. HK Island (Figures in net floor area) Tsim Sha Tsui Within risk management, the erosion of important Asking price: HK$28 million Admiralty Centre (Tower I & II) 68 China Hong Kong City (Tower I) 43 resilience is a critical component governance systems and proto- Agent: Melanie Krepp in making a building, and cols, a greater threat posed by an (6698 7740) of Okay.com Lippo Centre 68 Lippo Sun Plaza 51 companies, more functional and “innovative” pandemic and One & Two Pacific Place 127 Ocean Centre 52 productive. Actions to improve increased vulnerability to societal building resilience make and economic impacts. Bank of America Tower 73 26 Nathan Road 96 economic and financial sense. In particular, it highlighted a Bank of China Tower 138 The Gateway (Tower 1) 59 When Typhoon Mangkhut “roll-call of near-miss catas- Exchange Square 150 The Gateway (Tower 6) 68 passed through our part of the trophes” since 2000 and weak- region in 2018, it left behind US$3 nesses in preparedness to detect, Jardine House 130 International Commerce Centre 100 billion in economic losses and assess, report and respond to One International Finance Centre 175 Mira Place Tower 1 51 US$900 million in insurable acute public health threats. losses. Today, the economic The report also contained a Two International Finance Centre 185 impact on real estate from the survey, the Global Risks Per- The Landmark (Gloucester Tower) 137 current pandemic is also clear. ception Study, assessing both the More than 40 per cent of notified likelihood of a risk occurring The Landmark (Edinburgh Tower) 137 insurance claims due to Covid-19 globally within the next 10 years have come from real estate. and its negative impact. Rents for homes Average rents in Of note among the results for Average rents of 100 housing selected districts the 2019 and 2020 editions of the estates (HK$ per sq ft of study is that the spread of Rents (HK$ per sq ft of gross floor area) gross floor area)* infectious disease did not rank North Point Resilience among the 10 most likely risks in 31 Quarry Bay / Taikoo Shing either year. This is not to say that Chaiwan /Shau Kei Wan is a critical the risk was not taken seriously, Aberdeen / South Horizons but rather that participants per- component ceived more pressing concerns. 35 29 There are many reasons in making a individuals, companies and building ... governments may fail to act when 32 faced with evidence of a possible more functional threat, such as how scarce 27 resources are allocated and possi- 29 The losses real estate has ble first-mover disadvantage. * Provisional figure suffered from these events arises It is conceivable that a com- from property damage and busi- pany allocating capital to mitigate Jun 18 May 20* May 18 May 20 ness interruption. As occupiers some less tangible risks could be become more risk-aware, greater penalised in the short term Midland property price Property sales activity focus will be placed not only on relative to its peers by investors. index (’000 transactions) building attributes, but also on However, I would also argue that Hong Kong regional price indices property management. How these companies are also better 11 Last: 8,254 effectively a building is managed placed to achieve higher risk- Overall Hong Kong Kowloon will certainly interest insurers. adjusted returns on a consistent Hong Kong Island New Territories The risks posed by extreme basis. weather events and infectious Certain characteristics of our 200 9 disease have evidently not gone cognitive functioning may also away, while others are now more dictate or shape our lack of action. Glamour Court, Pok Fu Lam relevant than before. Cyber risks Tim Harford, writing in the This 1,232 sq ft penthouse has three bedrooms with 180 have become greater as demand Financial Times about “Why we one en suite and two bathrooms. It also has a 1,113 7 has risen for technological fail to prepare for disasters”, sq ft roof and two covered parking spaces, plus one solutions across the real estate identifies some key behavioural uncovered car parking space. spectrum. The digitalisation of characteristics that may be at play Asking price: HK$25 million 160 5 real estate, driven by the smart – normalcy bias, herd instinct, Agent: Christine Chong (9648 6082) of building concept and the use of egotistical optimism, exponential Landscope Christie’s International Real Estate robotics, artificial intelligence and myopia and wishful thinking. internet of things, presents addi- In the Global Risk Perception Jul 16, 18 Jul 13, 20 Jun 18 Jun 20 tional exposure for stakeholders. Studies, extreme weather events Cyberattacks pose a threat to and the failure of climate change network infrastructure, business mitigation and adaptation were Average Price of Secondary Residential Property continuity and data integrity. The rated the risks most likely to occur, in major cities potential cost of an attack has also and in the top three for their risen due to the burgeoning potential negative impacts. Beijing Shanghai Guangzhou Shenzhen privacy regulatory environment. Survey respondents certainly 100,000 In real estate, where information cannot be accused of a lack of is often exchanged across awareness of these issues.