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News Release


Jones Lang LaSalle: Macau’s Property Market Remains Robust

Hong Kong and Macau, 31 July 2012 -- Macau’s GDP expanded strongly in 1Q12, with the city’s gaming revenue being the key driver. The capital values and rental values across all property sectors, residential, retail and office alike, maintained an upward trend, according to Jones Lang LaSalle in its Macau Mid-Year Property Review today.

During 1Q12, Macau’s GDP recorded a strong growth of 18.4% y-o-y, driven mainly by the gaming sector. Macau’s total gaming revenue grew by 19.8% y-o-y in 1H12, reaching MOP 124.1 billion. The growth pace slowed down from the average growth rate of 42% in 2011. The city’s fixed capital formation recorded a strong growth of 44% y-o-y in 1Q12.

As of end March, Macau’s unemployment rate remained low at 2%, supported by the strong labour demand. The number of imported workers also exceeded the 100,000 level for the first time since July 2008, and registered a total of 100,922 as of end-May 2012.

“There are some alarming signs in the Macau economy with total retail sales already falling on a year-on-year basis in the recent months. This is echoed by the sharp deceleration in tourist arrival growth in May, which if persists, may further affect retail sales growth in the second half of 2012. While the various new entertainment development and infrastructure projects will continue to provide the Macau economy with some pillar supports, a potential drawback in tourist arrival and retail sales growth will potentially dent the city’s economic growth compared with the previous years,” remarks Marcos Chan, Jones Lang LaSalle’s Head of Research, Greater Pearl River Delta.


“The residential market picked up significantly in 1H12, following the slowdown in 2H11, with the strong upgrading and investment demand. On the other hand, the supply of residential stocks was also limited due to the government’s implementation of the Special Stamp Duty,” says Jeff Wong, Jones Lang LaSalle’s Head of Residential, Macau.

According to the DSEC figures, a total of 6,178 Sale and Purchase Agreements were recorded during the first five months of 2012, much higher than the total of 1,811 recorded in 2H11.

Three major residential projects were launched in 1H12:
  • Tower 10 (342 units) of One Oasis, Park Residence in Cotai South was launched for sale from HKD 4,500 to HKD 5,500 per sq ft (gross). Over 95% of the available units were reportedly sold.
  • 200 units in Tower 5 and Tower 10 of Star River Windsor Arch in Taipa were launched for sale at prices between HKD 7,000 and HKD 10,000 per sq ft. 150 units were reportedly sold.
  • 100 units in Nova Park were launched for sale by Shun Tak Holdings.  All units were reportedly sold for an average price of HKD 5,500 per sq ft.


Capital values for high-end residential properties rose by an average of 10.5% y-o-y in 1H12. For the mass and medium residential market, capital values recorded a strong growth of 19.8% y-o-y, driven mainly by the local demand.

The leasing market continued its growth momentum, backed by the increasing number of imported labour. The average rental value of high-end residential properties grew by 15.5% y-o-y in 1H12. For the mass and medium market, the average rental value rose by 15.1% y-o-y.

“We expect to see more expatriates entering Macau, with the opening of new entertainment facilities and the on-going construction works of the city’s infrastructure projects in the coming years, underpinning Macau’s residential leasing demand,” adds Jeff Wong.



The office leasing market remained active in 1H12, on the back of an increasing number of newly formed corporations in Macau.  According to the DSEC figures, the number of new incorporations registered in Macau totalled 881 in 1Q12, representing a 14.1% y-o-y growth. 

During 1H12, office rental values remained stable, whilst office capital values grew by 16.5% y-o-y with several sales transactions recorded.

As of the end of 1H12, the vacancy rate of the overall office market declined further to 15% from the 18% level registered in end 2011.

On the supply side, the new project, Nam Van Lake Zone A Lot 6, is scheduled for completion in 2H12.  This new project is expected to bring to the market a total of approximately 400,000 sq ft (gross) new office space.



“Macau’s retail sector started to feel the impact of Mainland China’s slowing economy in 1H12. In February, the number of visitor arrivals recorded a negative growth for the first time since July 2009, whilst the growth of retail sales also saw a slowdown in 1Q12,” says Gregory Ku, Jones Lang LaSalle’s Managing Director in Macau.

Following the negative growth of 1.5% in February, the number of visitor arrivals further declined by 6% and 8% y-o-y in May and June, respectively. For 1H12 as a whole, the number of visitor arrivals decreased by 8.8%. In 1Q12, Macau registered a total retail sales of MOP 12.8 billion, up 28% y-o-y. The growth was much lower than the average growth rate of 41.7% recorded in 2011. Amongst the different retail sectors, F&B and casual wear retailers were the most affected, with some of them being forced to relocate to the more affordable locations. Nevertheless, retailers in general were still keen to expand their business to the major tourist districts, with those from the jewellery, cosmetics and shoes sectors being the most active.

Notwithstanding the slowdown in visitor arrivals and the contracted growth in retail sales, average retail rents recorded a significant growth of 45.5% in 1H12, when compared to end-2011. The growth was mainly driven by the strong demand for prime retail space. During 1H12, the capital values for retail properties soared by 59.7%.

“We expect that demand for retail space, especially those located at the prime areas, will continue to increase in 2H12. In addition, visitor arrivals will likely rebound, with the opening of the Guangzhou-Zhuhai Intercity Railway in 4Q12. Retail rents and capital values are expected to remain on their uptrend”, adds Gregory Ku.



The investment market continued to be active in 1H12, with investors’ focus shifted to retail and office properties due to the limited stock in the residential market. During 1H12, a retail property in Rua de S. Domingos was sold en block to a Hong Kong investor for HKD 168 million. On the office side, three whole-floor transactions were recorded in the NAPE area: two transactions worth a total of approximately HKD 160 million were recorded in Dynasty Plaza and one transaction worth approximately HKD 80 million was recorded in China Civil Plaza.  The unit prices ranged from HKD 2,700 to HKD 3.500 per sq ft (gross). 

“Despite the external economic uncertainties, Macau’s gaming and tourist sectors are expected to continue to perform well and remain the key drivers for local economic growth. The new infrastructure projects will also help drive the momentum of the city’s economy. Investment demand is expected to remain active,” concludes Gregory Ku.