Hong Kong-based Telok Real Estate Partners plans to spend a projected HK$1 billion over the next three years building up to 20 small- to medium-sized residential projects in Macau.
After the successful launch in 2010 of its second residential project, Verde, to address the housing needs of younger homebuyers, the boutique closed-end opportunistic investment fund aims to become a more aggressive player in the mass home market.
'The fund has bought a 2,000 square foot development site and negotiation for another similar-sized plot is to be completed,' said Telok partner Philip Pang.
Each of the development projects involves building 30 or more flats of between 400 and 600 square feet in size, and requiring a total investment of about HK$50 million. 'Over the next three years we hope to build 10 to 20 such mass residential projects,' Pang said.
In 2009, the fund spent about HK$88 million to build the seven-storey Verde, a single residential block with 68 one- and two-bedroom flats between 424 and 1,150 square feet in size. Current secondary market prices at Verde are HK$4,000 per square foot, up 48 per cent from the price of HK$2,700 per square foot when the flats were launched in 2009, Pang said.
The success of the development was due to the rapid economic growth in Macau, he said, which had been fuelled by the transformation of the former Portuguese enclave into Asia's gaming and entertainment holiday destination. The jobs created to support the gaming and tourism sector had in turn brought new-found wealth to Macau households.