Hong Kong Apartment Is World’s Most Expensive

Five-Bedroom Luxury Duplex In City’s Mid-Levels Area Sells for US $57 Million

The world's most expensive apartment was recently sold in this building for 57 million US dollars

We’ve written before about the Hong Kong real estate market’s relatively fast rebound in the face of the global economic downturn, with exclusive properties like The Masterpiece attracting the attention of well-heeled mainlanders and Hong Kong residents alike. This week, an apartment in Hong Kong’s Mid-Levels area sold for a record-breaking HK$439 million,  or around US$57 million, and analysts expect a continued flow of money into the city’s luxury real estate markets as cash-rich individuals look to take advantage of the Hong Kong government’s recently lowered interest rates and the city’s appeal as an investment  haven.

Today, the AFP writes on the recently sold duplex, noting that the massive flood of mainland money coming into the market is exciting developers but worrying some economists who think this year’s 40% leap in the luxury property sector portends that a property bubble could be forming:

“You may see some more record-breaking prices in the luxury segment,” said Buggle Lau, chief analyst for Midland Realty.

“We have all the ingredients for a bubble coming up… With low interest rates and ample liquidity people are inclined to put their money into real estate.”

Demand from mainland Chinese investors looking to diversify their new-found wealth and snap up trophy property assets was also likely to buoy the market, said Savills’ head of research Simon Smith.

“There is quite a lot of momentum out there. If you look ahead there’s a chronic undersupply of residential units for luxury and the mass market,” he added.

Shanghai Developer Plans Luxury Home Furnishing Store “With A Twist”

Ausen Real Estate Development Set To Invest US$22 Million In Luxury Home Furnishing Retail Complex, Due To Open Next Year

Ausen World will bring a Western-style furniture shopping experience to Shanghai

While announcements of new large-scale real estate projects in China are nothing new, nor are they particularly exciting on the whole, Ausen Real Estate Development Co.’s recently-announced plans to open a massive home furnishing retail complex near Shanghai next year stand out. Set to be located in Xinbang, in Shanghai’s Songjiang District (less than an hour’s drive southwest of downtown), the austerely named Ausen World Brand Home Furnishings Center will include features not often seen at furniture stores, including a hotel and restaurant for shoppers who prefer to make a weekend out of their shopping trips. Although slapping a hotel onto a massive furniture store isn’t exactly unheard of, it most certainly is unusual.

According to company spokespeople, Ausen World‘s main focus will be on American and European furniture, popular but often poorly understood by Shanghai-area residents. The center will also include Premium home furnishing areas designed to emulate “DIY” stores like the Home Depot. From Furniture Today:

Another unusual feature for a Chinese retail center will be the presence of on-site interior designers, who can help consumers with home design and product choices.

In a statement, Ausen said it intends to be a door to the Chinese market for Western brands. It will offer help with operating in the country, including support of import entry, logistics and storage.

Zhang said he believes the center will offer a “family feel” that is missing from most Chinese retail spaces, with a rewarding consumer experience for shoppers and their children. An Australian company will design the “eco-garden” look of the complex, including outdoor leisure areas.

An Urban Oasis In Hong Kong

The Masterpiece Looks To Become One Of The City’s Most Exclusive Residential Towers

Apartments at The Masterpiece feature breathtaking views of Hong Kong -- and have price tags to match

The Standard today profiles the Masterpiece, a luxurious residential tower in Hong Kong’s Tsim Sha Tsui district. Even in a city like Hong Kong, which is no stranger to extravagant residential towers, the Masterpiece stands out:

The exceptionally spacious apartments, featuring a floor-to-floor height of 11 feet and two inches, have a neutral interior that creates a warm and harmonious ambience.

…

The motto for the bar is if you have got it, flaunt it, and the wine cellar that is at the heart of it is the perfect showcase for your French and other vintages to relatives, friends and colleagues.

The master en suite bedroom continues the neutral-hued design. An atlas feature on the bedroom wall exudes a cosmopolitan feel, and the walk-in closet offers storage aplenty while the full-length mirror deepens the sense of space.

The other bedrooms also exhibit well-thought-out designs. One of them features a Japanese feel that continues the cosmopolitan theme.

The New World Development and Urban Renewal Authority joint development offers a plethora of leisure and shopping spots at your feet in the form of the recently built, six-story K11 mall below.

The exclusive clubhouse offers plenty of indoor and outdoor facilities to ensure your work-life balance, and the sky garden is an urban oasis amid the hustle and bustle of city life.

With a Tsim Sha Tsui MTR exit just across the road from the building, the Masterpiece combines luxury, style and convenience in one of the most desirable addresses in town.

Chinese Snapping Up Australian Luxury Properties

Chinese Buyers On Global Shopping Spree, Buying Real Estate And Australian Assets As Prices Remain Lower Than In Recent Years

Chinese buyers have flocked to the Sydney waterfront to buy luxury properties at historically low prices

We have previously written on mainland Chinese buyers scouring the globe to snap up contemporary Chinese art, fine wines and antiques at auction, and in recent months this emerging group of shoppers has become far more visible in places like Australia, where wealthy Chinese buyers have become one of the most motivated buyers of luxury properties. As China Daily writes today, Chinese buyers are converging on some of the best luxury properties in Sydney including big homes on the harbor, and new condominium developments.

Chinese buyers are taking advantage of a number of factors that have benefitted them in the past few years, including a weaker global economy and lower prices on luxury goods of all classes, a stronger focus on spending rather than saving, and a more welcoming Australian property market. With an exchange rate that favors the yuan, relaxed Australian rules on ownership of property by foreigners, and an already populous Chinese community, the time seems right for Chinese with the means to buy some of Sydney’s prime waterfront real estate.

As Jack Levine points out, Australia has become one of the most popular destinations for Chinese travelers, students, and immigrants in the last decade, trailing only the UK and New Zealand:

Hangzhou Hopes To Boost Tourism With New Raffles City “Mega-Hotel”

UNStudio-Designed Raffles City Mega Hotel To Be 60 Stories Tall, Incorporating Offices, Residences, Mall, 5-Star Hotel

Raffles City Hangzhou will reach a height of 60 stories, presenting views both to and from the Qiantang River and West Lake areas.

The British website Holiday Hypermarket reports on the massive, mixed-use Raffles City “mega hotel,” currently under construction in the city of Hangzhou, which city planners hope will increase tourism and boost the local economy. Hangzhou, situated near Shanghai in China’s coastal southeast, is known more for its natural beauty and traditional architecture, but city officials hope that the “totally green” Raffles City mega hotel will make the city more attractive for companies that would otherwise be drawn to its more cosmopolitan neighbor.

This will be the sixth Raffles City project designed by UNStudio, following similar projects in Singapore, Shanghai, Beijing, Chengdu and Bahrain, according to the company’s website. As Holiday Hypermarket points out, Raffles City Hangzhou is expected to be completed by 2012, and will feature several unique aspects that should set it apart from other large-scale mixed-use construction projects currently in progress throughout the mainland:

Shanghai’s Property Market Continues To Grow

Real Estate Prices Have Fluctuated In China’s Metropolitan East, But Signs Of Recovery Are Starting To Surface

Higher-end apartments in Shanghai appear to be resisting the global economic downturn, increasing in demand and price in the last several months

Although news coming out of emerging markets seems to be more rosy than that of their more developed counterparts, China itself has not been unaffected by the global economic downturn. Prices of hard assets like real estate have been hit particularly hard in some cities, like Beijing and Shanghai, where strong demand over the last several years has created something of a “bubble,” yet not as severe as those found in California or Florida. However, as China’s economy begins to head north again, several real estate experts have written on the resiliance of the real estate markets in China’s most important economic centers. In Shanghai alone, Shanghai Uwin has put out a study indicating that more than 1 million sqm of new homes, excluding those designated for relocated residents due to urban redevelopment projects, were sold across the city during the first 15 days of this month, up 12 per cent from the same period in May. This indicates that the city’s real estate market is, gradually, gaining steam again.

The important thing to keep in mind when trying to conceptualize the Chinese market is that many of the buyers in cities like Shanghai, Shenzhen, Guangzhou, or Beijing are first-timers, and tend to be on the cautious, young side. Since China’s economic power centers are concentrated on the east coast, in only a handful of huge metropolises, real estate is virtually always going to be in relatively short supply and relatively high demand. The population size — and economic and employment realities — guarantees this. So even in a comparatively sluggish market, when many younger people are finding it harder to settle down, real estate in Shanghai and Beijing is still going to perform pretty well.

Macao Investing Heavily To Beat Global Slowdown

Construction On A Number Of Stalled Projects To Start Up Again, As City Aims To Cement Its Reputation As The “Vegas Of The East”

One Central, set to be completed within the year, is to be one of Macao's top luxury residential complexes

Macao, the former Portuguese colony that rejoined China in 1999, has had its share of ups and downs over the past few years. In recent years, the city replaced Las Vegas as the world’s largest gambling market by total revenue, but not long after gaining this distinction, the city was hit hard by the global economic downturn — which bit into the city’s crucial tourism industry as well as its breakneck pace of construction. Now, as the recession eases somewhat in the region — China itself has not been hit as hard as many more developed economies — Macao aims to restart its vast construction efforts and attract more young professionals, luxury shoppers, and gamblers.

Today, the New York Times has a great article on the ongoing transformation of Macao — what was once a backwater trading hub has, like its neighbor Hong Kong, over the years become an important business and tourism center. As the city continues to carve its unique place in the Chinese and East Asian economies, developers continue to work hard to create in Macao a world-class real estate and travel destination. With large-scale luxury developments like One Central due to open within the year, it looks like Macao is, indeed, starting to get back on its feet:

The Right Way(s) and the Wrong Way(s) to Invest in China

When Looking Into Investments Like Real Estate Or Art, A Global Perspective And Awareness Of Chinese Culture Should Be Taken Into Account

The Motley Fool recently did a piece on “The Wrong Way to Invest in China,” detailing how most investors who want to get into the not-as-hot-as-before-but-still hot Chinese market often think that the best and safest way to do so is to dive in with exchange-traded funds like the iShares FTSE/Xinhua China 25 Index (FXI). Despite the popularity and relative success of this fund, by going with these bundled funds investors are missing out on the exact thing that makes the Chinese market so attractive for investment — the inventiveness and dynamism of the companies that power its growth:

By investing in FXI, you’re not sufficiently tapping into the entrepreneurial spirit of the Chinese people. See, FXI tracks a FTSE/Xinhua index mainly comprising state-owned enterprises (SOEs). In fact, of the top 10 holdings of the exchange-traded fund, 10 are SOEs (or are subsidiaries of SOEs, which for my purposes are one and the same).

Basically, jumping aboard FXI looks great — with its growth, relative to non-Chinese funds, but in actuality it is the involvement of these SOEs that holds it back, since the Chinese government has spun these enterprises off at an increasingly rapid pace since the 1970s. At the rate its going, getting too tied up with SOEs now could cause big problems later. And the monolithic SOEs that the government does hold onto for the long term may not be as concerned with making profits as their smaller competitors, since they will continue to lean on the support given them by the CCP.

The Chinese government has certainly reduced its ownership of some SOEs, but given the size of those companies and the size of the government’s remaining ownership, it could be a long time before those SOEs are fully privatized. Just imagine if the PRC decided to suddenly dump its huge stake in China Life Insurance into the public markets. It would be an utter disaster for those shares.

The bottom line is that, despite the loosening of the PRC’s grip, SOEs still do not put shareholder interests first. Their motivation is still at least partly political, so you’re better off looking for Chinese companies that have your interests at heart.

Their recommendation?

“America For Sale” or Overemotional Xenophobia?

Is It A Return to ’80s Style Protectionism Or Just A Slow News Day? Both?

Several American media outlets have reported lately on groups of wealthy Chinese coming to the US to snatch up distressed real estate. Although these stories ring of sensationalism, they are true — however, as with everything, they must be qualified. Here’s BusinessWeek‘s recent take on these mainland “real estate tourists”:

At the end of February, 40 wealthy Chinese embarked on a housing tour of the US. The trip, run by Soufun Holdings, one of China’s largest real estate companies, kicked off in Boston and continued on to San Francisco, Los Angeles and New York. For a fee of US$3,600 apiece, tour group members perused homes in the US$500,000 to US$1 million range.

The trip was so popular that Soufun had to turn away 400 applicants.

“Every day people are calling about it,” said Zhao Xinyu, public relations manager at Soufun’s Beijing office. Based on customer demand, Soufun may expand such trips to include Australia, the UK and Japan.

The popularity of Soufun’s trip has led to speculation that this might signal a new trend in Chinese spending habits, with individuals looking to store more of their wealth overseas.

Turning Ancient Chinese Homes into Modern Luxury Hotels

Yesterday’s traditional mansion becomes today’s 5-star hotel

Photo © Winston Lim

Chinese and other Asian entrepreneurs are restoring historic wooden houses all over China, with the hopes of creating boutique luxury hotels in coming years. This trend promises to have a ripple effect throughout China’s ancient cities — which boast dozens if not hundreds of these traditional houses just waiting to be transformed. According to AsiaOne Travel, Singaporean businessman Winston Lim

plans to incorporate [several] houses into his upcoming luxury boutique hotel in Zhu Jia Jiao town near Shanghai. To be completed next year, the 180-million yuan hotel will have 60 suites, a spa and restaurants. There will also be a museum for Ming dynasty antique furniture and it will house pieces from his personal collection.

Traditional wooden houses turned into boutique hotels are not exactly new, as a concentration of these hotels can be found in places like Beijing’s Houhai area, but entrepreneurs like Winston Lim have grand visions of branching out beyond hotels in coming years, transforming these houses into everything from universities to private villas. No matter what these developers eventually do with their ancient houses, they are certainly holding on to lucrative investments. As for Mr. Lim’s grand dreams, he doesn’t seem to be in much of a hurry to unload his potential goldmines:

[Lim's] obscure investment in the houses is paying off. His mix of single- and double-storey houses are now worth almost 26 times their original price five years ago. But he has no intention of letting any of them go.