TRANSACTIONS in the local retail property sales market were active in the first quarter of this year, with a total of $5.79 billion exchanging hands in 159 transactions, according to the Kaiser Properties First Quarter Retail Report. There were 100 sales transactions in Kowloon, with Sham Shui Po the most active area. The remaining deals were on Hongkong island, with Wan Chai and Causeway Bay accounting for half of the business. Prices are rising steadily, and landlords appear to be holding on to properties, in anticipation of an even greater rise in market value. The largest transaction in the first quarter was the sale of the Luen Bang Restaurant in the Shun Tak Centre for $565 million, followed by the $530 million sale of the Jumbo Sogo site in Causeway Bay. Street-side shops in Causeway Bay and Wan Chai saw a high of $32.58 million in the quarter, with the sale of the 2,200 square foot Shop 2, 1-11, Chun Yuen Street. The report says transactions in the Shau Kei Wan area increased as a result of Shau Kei Wan Plaza now taking residential tenants, and construction of several new public housing estates and Home Ownership Scheme projects in the area, including Yiu Tong Estate, which is to be one of the largest housing estates at Island East. The average price for retail space in the Shau Kei Wan area is $7,000 to 8,500 per sq ft, but this looks set to rise as the housing developments near completion. Retail rentals on Hongkong island were less active than sales in the first quarter and the bulk of activity saw landlords buying larger units for sub-division and lease. From the beginning of March, the market has seen increased leasing activity in the 2,000 sq ft to 5,000 sq ft range from restaurant and fast-food chains looking to expand in Wan Chai and Causeway Bay. The report says Sham Shui Po was the most active area in Kowloon in the first quarter, with 21 transactions taking place, followed by Tsim Sha Tsui and Mongkok. Sham Shui Po's activity concentrated on developers buying older buildings for re-development into mixed-use complexes. An example of this was Cheviot Ltd, which bought 18, Wing Hong Street, in Cheung Sha Wan for $126.8 million. In the Cheung Sha Wan area, there were four transactions, each involving more than $20 million, and three transactions involving more than $10 million. The most active streets were Cheung Sha Wan Road, Castle Peak Road, and Un Chau Street, which together yielded 14 transactions. In Tsim Sha Tsui, 20 retail transactions took place in the first quarter totalling $1.99 billion. The largest transaction was Special Song Ltd's sale of the Italy, France, Japan Fashion Square on Nathan Road, to Fair Star Investment in March for $480 million. In April, it was sold again to the Lippo Group for $680 million - an increase of 40 per cent in one month. The Lippo Group intends to refurbish the 60,000 sq ft retail complex and rename it World Trade Square. The Tsim Sha Tsui area has seen several investors buy groups of single street-side shops for which prices are rising. At 15, Cameron Road, a 1,500 sq ft shop sold for $44 million, while a 650 sq ft Peking Road shop went for $67 million. The Mongkok area's largest transaction in the first quarter was the sale of 550-552, Nathan Road for $540 million for redevelopment. The report says investors have been looking to buy the older cinemas in Mongkok for redevelopment. A recent example of this activity is the sale of the Washington Theatre on Parkes Street for $320 million. Single street-side shops in Mongkok have seen little movement since the beginning of the year - only 16 transactions - which the report says is due to high prices being asked by the owners. Issued on behalf of Kaiser Properties Company by Lau Roots Limited. For further information, please call Jo Shephard at 528 1793.