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Desperate landlords offer renovation subsidies to lure tenants as Hong Kong’s vacant office space hits 21-year high

Hong Kong’s commercial landlords are offering incentives such as renovation subsidies to lure tenants, as the amount of office space lying empty reaches the highest level in 21 years, according to property services company CBRE.

Some landlords have begun offering a one-off subsidy to help new tenants fit out their office space, said Alan Lok, executive director of advisory and transaction services for offices at CBRE.

“In some cases, the landlord would offer a subsidy of about HK$100 (US$12.9) per square foot,” said Lok during a briefing on Wednesday.

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The subsidy is attractive because relocation costs in Hong Kong are very expensive, he said. For a prime renovation costing HK$1,000 per sq ft, the relocation cost may add up to HK$1,200 per sq ft after including the price of returning the office to its original state when the lease ends. The cost can be spread out to a monthly HK$30 per sq ft or thereabouts over three years.

“For most relocations with cutting costs as the objective, it takes a place with a rent of HK$30 per square foot less than” the original rent to justify the move, said Lok. “Some offices do not have their head offices in Hong Kong. It is not that easy to approve that sum [for renovation].”

According to CBRE, 7.8 million sq ft of office space – greater than the size of four Central Plazas – sat vacant in Hong Kong in September, the highest since 1999. An additional 950,000 sq ft of surrendered space – returned by tenants before the lease expires – is available in the market, just shy of the size of the HSBC building.

Desperate landlords have been offering a broader range

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Desperate landlords offer renovation subsidies to lure tenants as Hong Kong’s vacant office space hits 21-year high



a skyscraper in a city: The amount of office space lying empty reached the highest level in 21 years in September, according to property services company CBRE. Photo: K Y Cheng


© SCMP
The amount of office space lying empty reached the highest level in 21 years in September, according to property services company CBRE. Photo: K Y Cheng

Hong Kong’s commercial landlords are offering incentives such as renovation subsidies to lure tenants, as the amount of office space lying empty reaches the highest level in 21 years, according to property services company CBRE.

Some landlords have begun offering a one-off subsidy to help new tenants fit out their office space, said Alan Lok, executive director of advisory and transaction services for offices at CBRE.

“In some cases, the landlord would offer a subsidy of about HK$100 (US$12.9) per square foot,” said Lok during a briefing on Wednesday.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

The subsidy is attractive because relocation costs in Hong Kong are very expensive, he said. For a prime renovation costing HK$1,000 per sq ft, the relocation cost may add up to HK$1,200 per sq ft after including the price of returning the office to its original state when the lease ends. The cost can be spread out to a monthly HK$30 per sq ft or thereabouts over three years.

“For most relocations with cutting costs as the objective, it takes a place with a rent of HK$30 per square foot less than” the original rent to justify the move, said Lok. “Some offices do not have their head offices in Hong Kong. It is not that easy to approve that sum (for renovation).”

According to CBRE, 7.8 million sq ft of office space – greater than the size of four Central Plazas – sat vacant in Hong Kong in September, the highest since 1999. An additional 950,000 sq ft of surrendered space – returned by

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One of Austin’s weirdest homes hits market for $2.2 million

If only the curvilinear walls of the “Sand Dollar Home” or “Mushroom Home” could talk.

An iconic piece of architecture shaped in the form of a mushroom is now on the market near Austin, Texas for $2.2 million, according to the listing on Grossman & Jones Group.

In the spirit of the “Keeping Austin Weird,” this Lakeway home perfectly fulfills that vibe and was most recently featured on the Austin Weird Homes Tour, as first reported by Culture Map’s John Egan. You’re unlikely to find anything as otherworldly and unusual on the market in Texas as this lakeside abode — if you have a cool $2 million at your disposal, that is.

COLOSSAL CLOSET: Headline-stealing Woodlands mansion and its $500,000 ‘she cave’ closet finally sells.

Yes, if only the curvilinear, sculptural walls of this home called

Yes, if only the curvilinear, sculptural walls of this home called “The Sand Dollar Home” or “Mushroom Home” could talk.  An iconic piece of architecture that’s shaped in the form of mushroom is now on the market near Austin, Texas for $2.2 million, according to the listing on Grossman & Jones Group.

In the spirit of the “Keeping Austin Weird,” this Lakeway home perfectly fulfills that vibe and was most recently featured on the Austin Weird Homes Tour. You’re unlikely to find anything as otherworldly and unusual on the market in Texas as this lakeside abode, if you have a cool $2 million at your disposal.

Grossman & Jones Group

The unique Sand Dollar House is perched on a scenic bluff along the Colorado River by Lake Travis right outside of Austin. The circular home boasts a round top and is a 2,240-square-foot jaw-dropping piece of architecture. It features three bedrooms, 2 1/2 bathrooms, and offers sweeping vistas overlooking the lake.  There’s also a pathway from the property down to the shores of Lake Travis.

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LGI Homes (LGIH) Hits 52-Week High, Can the Run Continue?

Shares of LGI Homes (LGIH) have been strong performers lately, with the stock up 9.9% over the past month. The stock hit a new 52-week high of $127.59 in the previous session. LGI Homes has gained 78.6% since the start of the year compared to the -16.5% move for the Zacks Finance sector and the -17.7% return for the Zacks Real Estate – Development industry.

What’s Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn’t missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 4, 2020, LGI Homes reported EPS of $2.21 versus consensus estimate of $1.49 while it beat the consensus revenue estimate by 4.3%.

For the current fiscal year, LGI Homes is expected to post earnings of $9.16 per share on $2.12 billion in revenues. This represents a 30.63% change in EPS on a 15.28% change in revenues. For the next fiscal year, the company is expected to earn $10.24 per share on $2.4 billion in revenues. This represents a year-over-year change of 11.78% and 13.13%, respectively.

Valuation Metrics

LGI Homes may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style

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Investors Pile Into U.K. Rental Homes as Covid Hits Young Buyers

(Bloomberg) — Investors are pouring record amounts of cash into new U.K. rental homes, betting that demand will remain high as the pandemic batters the economy and puts ownership out of reach for more first-time buyers.

Investment in purpose-built rental apartments and houses will hit 4 billion pounds ($5.2 billion) this year, up from 2.8 billion pounds in 2019, according to a report from broker Knight Frank and residential property review site HomeViews. The market has so far proven resilient to the Covid-19 downturn, with rent collection averaging 95% in the period from March through August, according to the report.



chart: Generation Rent


© Bloomberg
Generation Rent

Demand for rental housing in the U.K. has been growing for years, with one in five households renting privately, up from one in 10 in 2001, the report said, citing the English Housing Survey. The coronavirus has accelerated this trend, with soaring house prices, tighter lending conditions and economic uncertainty forcing more first-time buyers to postpone their ownership plans.

“I think the outcome of the Covid situation is that we will have more people renting for longer, simply as plans for home ownership get delayed further,” James Mannix, head of residential development and investment at Knight Frank, said by phone.

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©2020 Bloomberg L.P.

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