Hong Kong Commercial Property From HKD$4m

New Territories is located in the west part of Hong Kong, the westernmost continental district of Hong Kong. The New Territories property market has a very limited new supply of industrial property in the next few years as the government push to increase utility of industrial space by rezoning into residential/retail/office uses. Your investment will acquire the industrial properties in New Territories directly via direct ownership or custom established vehicle. The idea is to exploit the current disparity between commercial leasing prices between New Territories and the average prices and even to those in Hong Kong Island.

About New Territories Market

There is a significant investment in residential by Sun Hung Kai and future plans for large shopping centre development underpins medium term growth Infrastructure development such as New Territories-airport tunnel and potential future developments by MTR will increase the value of those properties in the region.

Opportunities

Hong Kong has the best combination of balance sheet health (net deposit in banking system) and sustainably high economic growth (being the conduit of investment in/out of China).

Positive Factors

Government push to increase utility of industrial space by rezoning into residential/retail/office uses may result >15% drop in total inventory in the next few years – will push up industrial rents as well as lift values as higher prices can be achieved for other uses
Low absolute prices at present – at prices of HK$1500 – 2800 per square foot, industrial space is a fraction of office/residential often trading at 10x that value, and we are effectively buying near construction costs
Major infrastructure lift – development such as HK-Macau bridge, the Tuen Mun-Airport tunnel, as well as possible future MTR extension from New Territories to Airport and/or Tsuen Wan will significantly increase value of properties in this region

Investment and Fee Structure

Size – Minimum HK$4m
Borrowing – 50% gearing ideally, for improved returns and tax deduction
Lock-ups – Expected macro and infrastructural trigger in 2016/17, when price action will be most favouable, so four year timeframe is the most ideal
Structure – managed mandate (i.e. not pooled fund), investors own the share of special purpose companies with properties as underlying assets, so there is no counter-party risk
Return – investments are purchased for capital gains, but periodic dividend payments may be designed into capital structure

Disclaimer

This information has been prepared by Sachs Property with reference to various managed investment themes.
This information has been prepared solely for illustrative and information purposes and does not constitute an offer or invitation to subscribe to the property.
While the greatest effort has been made to ensure the accuracy of the data, no liability lies with the authors for any inaccuracies that may be present. This document, the ideas and themes it puts forward, must be considered confidential and are not to be duplicated or distributed to any third party without the express consent of the managers of the property.
This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. Historical return data is no guarantee of future returns.
Distribution of this presentation may be restricted by law and you should observe any such restrictions.
This presentation does not take into account individual investment objectives, your financial situation or particular needs. It does not purport to contain all the information needed to evaluate the property. Prospective investors should make their own independent evaluation of an investment in the property and conduct their own investigations and analysis.