Global: Move over Hong Kong. Macau, China’s former sin city is suddenly looking like a safe bet on the property market
Established in the 1960s as a gambling hotspot, Macau was once infamous in Asia as the ultimate vice town. Gambling was entirely legal, but it wasn’t the sort of place you went for a weekend unless you had friends in the people-removal business. Skip forward to 2002 and the lifting of the monopoly on Asian ownership saw the Vegas casino powerhouses move in.
Within five years the amount of money moving through the Macau strip was on average seven times what Vegas typically saw, fuelled now by an emergent Chinese middle class, not to mention a fleet of Russian and Arab private jets.
However China had other plans. The ever more westernised superpower steadily opened the sluice gates, wiping out all traces of corruption, junkets and blind-eye practices within Macau, which shares the same SAR setup as Hong Kong. The result was a dramatic drop in the fortunes of a local economy that was entirely pegged on the gambling industry, further exacerbated by an Asia-wide slowdown on growth and property prices.
One Grantai development
As of 2015 however, the odds on the table have changed. China is keen to push Macau, and the national economy, resolutely toward the middle ground consumer market. Eight new hotel-casino complexes are currently being built. Gambling is still present, but there’s been a Vegas-style push towards diversified – and cleaner – entertainment.
Boudoirs have been replaced by fashion boutiques, housed in hotels’ vast malls. Backstreet gambling dens are now Italian-style eateries and coffee bars. Live entertainment now comes in the form of Cirque Du Soleil-style live shows, as well as a series of high tech theme parks. The offering is squarely focused both at the mainland Chinese and the ex-pat market.
The latter will be particularly interested to know that Macau – currently only 90 minutes by ferry from Hong Kong – will soon be an even shorter hop thanks to the completion of the Hong Kong-Zuhai Macau Bridge in 2018, as well as an expansion of the Pac On Ferry Terminal, Macau International Airport and, from 2020, a new Light Rail Transit system connecting all of the above.
The residents' pool at One Central
It’s not just logistics that have brought Macau closer to Hong Kong either. Buoyed by growing residential and service markets, the median monthly income in Macau is now higher than Hong Kong’s. Macau’s mid-to-high end residential offering now looks promising, with luxury developments averaging USD $13,148 per sqm to Hong Kong’s $34,746.
Top end developments, according to estate agent Savills, are One Central, One Grantai, Star River Windsor Arch and One Oasis. Tower 6 of One Central is currently owned by UK listed Macau Property Opportunities Fund, while the others are backed by local Macau or Mainland Chinese investors.
Of the above the range begins with the One Oasis apartments starting at 625 sqft and USD $774 per sqft. The biggest apartments are to be found at One Grantai, ranging from 2,100 to 5,300 sqft with the same asking price and acar parking facilities. At the high end, the One Central residences beginning at USD $1,096 per sqft for apartments ranging from 654 to 3,006 sqft.
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This Asian city of dreams is looking to align itself with Vegas-like consumerism and entertainment, its sights set on the twin peaks of an emergent Asian middle class, mostly down for the weekend and the ex-pat market, mostly funnelled from Hong Kong. The bridge is literally being built, wages are up and property is still down. With only a few hundred new mid-to-high-end developments planned over the next three years, isn’t it time you betted on China’s original lucky city?
For more information on the properties listed, contact Cindy Liu at Savills by emailing cliu@savills.com