Hong Kong-based investment fund Telok Real Estate Partners is looking to add two more projects to its portfolio in Macau, where it expects home prices to continue rising in the face of a severe supply shortfall over the next two years.
Despite the Macau government tightening mortgage lending policies and introducing a 10 per cent buyer's stamp duty to curb investment demand in October, the fund has found buyers for all the units in three existing projects, generating HK$800 million.
The projects, which are due to be completed over the next two years, are the 160-unit Cerese; the 32-unit Casa Verde; and the 30-unit Lazarus Verde. The units were sold for between HK$3 million and HK$4 million, or HK$6,000 to HK$6,500 per square foot.
Telok partner Philip Pang said the fund had been negotiating land deals to develop one or two more projects.
"We will focus on developing projects that cater for first-time homebuyers and up-graders, with selling prices of between HK$3 million and HK$4 million," he said.
The fund has committed HK$590 million of its estimated HK$1 billion investment target to building up to 20 small- to medium- sized residential projects by 2015.
Pang said he remained upbeat about the outlook for Macau's residential market despite the measures to curb investment demand. He said there were just 4,600 new units in the pipeline between now and 2015, or 1,547 a year.
That was down a third from an average of 2,325 a year from 2006 to 2010.
"And nearly 80 per cent of those projected new units have already been sold," Pang said.
Telok projects the market needs 4,000 flats a year to satisfy demand, since rising household income will lure people to up-grade to bigger flats.
"Demand will outstrip supply by 2.5 times," Pang said.
Macau flat prices rose to a record HK$88,097 per square metre in March, according to government's latest figures, up 25 per cent since February. The number of transactions jumped 93 per cent to 1,569 in March, from 812 in February.
"The surge in prices and sales volume has been boosted by developers releasing new projects in a rush ahead of the introduction of the new rule regulating the sales of new flats," said Ronald Cheung Yat-fai, the chief executive of Midland Realty 's Macau office.
The new rule will prohibit developers from offering projects for pre-sale unless the foundations have been laid.
Developers are now allowed to sell their projects off-plan once the plans have been approved.
The government has not yet announced a timetable for the introduction of the new rule.