Yu Ming bides time in expanding portfolio of serviced apartments

PUBLISHED : Monday, 20 October, 2008, 12:00am
UPDATED : Monday, 20 October, 2008, 12:00am

Yu Ming Property Management is looking for acquisitions to expand its serviced apartment portfolio, but is waiting for prices to reach a more attractive level.

Director Fanny Lam said asking prices for en-bloc buildings remained high although many properties had been put on the market for sale amid the downturn.

'We see prices have not dropped much yet, or at least have not returned to 2005 levels,' Ms Lam said.

The firm is seeking acquisition opportunities in SoHo, near Central.

Desmond Poon, an associate director at property consultant Chartersince, said that asking prices were negotiable but most owners were putting up resistance to any large discounts.

'Many cash rich investors are just interested in picking up bargains. They told us they were in no hurry to buy unless steep discounts were offered,' he said.

Yu Ming Property operates two serviced apartment blocks for the mid-price market in Tin Hau and Pok Fu Lam. A third block known as Domus is on Queen's Road West and will open in February next year.

Launched last month, the nine-storey Domus U at 97 Pok Fu Lam Road is a serviced apartment block opposite the University of Hong Kong. About half the property has been leased since Yu Ming Property offered a 23 per cent discount until the end of December.

Typical units on the second to eighth floors, each measuring between 440 square feet and 480 sqft, would be rented for as low as HK$16,800 a month inclusive. The rate was lower than the original range of between HK$22,000 and HK$45,000.

Ms Lam said the company would spend up to HK$6 million to restructure the Timeplus shopping centre in Causeway Bay to cater for one or two big tenants.

All 99 shops at Timeplus will be closed by the end of the month. Forty per cent of the tenants declined to renew their leases even though rents had been halved.

Yu Ming Property is majority owned by Tong Fung, the chairman of Yu Ming Investments.