Tsuen Wan project boosts industrial sales in July

Both end-users and investors are keen on small industrial properties

PUBLISHED : Wednesday, 07 August, 2013, 12:00am
UPDATED : Wednesday, 07 August, 2013, 3:51am

Sales of industrial properties surged last month, driven by strong demand for small factory units in HKR International's DAN6 project in Tsuen Wan.

A total of 376 industrial properties were sold in July, according to commercial real estate agency Ricacorp (CIR) Properties, up 89 per cent from the 199 transactions in May and 80 per cent higher than the 208 sales in June.

But as the weight of sales swung to smaller factory units, the total sales value grew a slower 11 per cent to HK$2.55 billion in July from HK$2.29 billion in June.

"The increase is mainly due to the launch of [DAN6] in Tsuen Wan, where about 200 units or 90 per cent of the industrial premises were sold in about three days," said Raymond Chu Leung-hang, senior district director at Ricacorp. Lump sum prices for the small units ranged from as low as HK$1.99 million to HK$6 million.

Chu said HKR began selling the industrial units in late June at prices between HK$4,600 and HK$6,600 per sq ft.

"Buyers needed to pay a doubled stamp duty of 3 per cent instead of 1.5 per cent. But on a unit costing HK$2 or HK$3 million that translated into an extra cost of only HK$30,000 to HK$45,000, and buyers were not put off," explained Chu.

He added that small indusRbetrial properties were sought-after by both end-users and investors, but despite the recent strong surge in sales, the overall industrial property market remained sluggish compared with late last year or early this year.

In late February, the government announced a plan to double the stamp duty on purchases of residential and non-residential property valued at more than HK$2 million, with the aim of curbing rising prices. The move saw industrial property sales fall from 830 in February and 774 deals in March, to just 247 deals in April and 199 in May.

Centaline Commercial director Kennie Kwok said market sentiment had since improved. Newly built industrial properties were particularly popular among investors, as those premises were suitable for different tenants, she said.

The agency said four units at Hanison Project Management's new industrial building The Bedford in Tai Kok Tsui were sold a few days after they were launched last week.

The four units, each of 3,040 sq ft, were sold for prices ranging from HK$20.67 to HK$21.58 million, which equated to about HK$6,800 to HK$7,100 per sq ft in terms of gross floor area. Together with three other units which were sold previously, seven out of 19 units at the building have now sold.

Matthew Chow Ka-fung, director of Hanison Project Management, said the supply of new industrial properties was low, so the outlook remained bright.