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News Release


Jones Lang LaSalle: Macau’s Property Market to Maintain Steady Growth in 2013 under Austerity Policy Measures

HONG KONG AND MACAU, 6 August 2013 – Although the government’s austerity measures remain in place, Macau’s property market is expected to maintain a steady growth in 2H13, largely driven by the strong growth of the gaming revenue, limited supply, and stronger cash flows in the low interest rate environment, according to Jones Lang LaSalle in its Macau Mid-Year Property Review today.

Macau’s gaming revenue rose to MOP 148.7 billion in 1H13, up 15.3% y-o-y, beating estimates and exceeding the 13.5% growth for the whole year of 2012. Supported by the robust growth of the gaming revenue, Macau’s GDP registered a 10.8% y-o-y growth in 1H13 to MOP 84.8 billion.

The buoyant economic environment drove private consumption expenditure higher, which recorded a 10.2% y-o-y growth in 1Q13. Meanwhile, underpinned by the construction of several massive infrastructure developments including the new gaming projects in Cotai, the Macau Light Rail Transit, and Taipa Ferry Terminal, the fixed capital formation rose by 14.7% y-o-y in 1Q13. Looking into 2H13, several holidays and travel programs are expected to further stimulate the economy, leading to a possible double-digit growth of Macau’s GDP for the whole of 2013.

The travel industry witnessed a similar upward trend in 1H13. Macau’s total visitor arrivals reached 14.14 million in 1H13 after the launch of Guangzhu Intercity Railway on 1 January 2013,  representing a 4.2% y-o-y growth, a notable increase from the 2.5% growth in 1H12. Chinese visitors accounted for 62.9% of total visitor arrivals, up 3.2% y-o-y. With the opening of the first floor in the Zhuhai Gongbei Port Combination Examination Building on 28 June, along with more holidays and travel programs in 2H13, an increasing number of visitor arrivals is projected for Macau later this year.

The labour market continued to improve with the unemployment rate remained at the low level of 1.8% in June 2013, while the overall median monthly employment earnings further increased to MOP 12,000 in 2Q13, up 9.1% y-o-y.

As of May 2013, the total number of imported labour in Macau recorded at 118,600, representing an increase of 8,000 from end 2012.  As several large-scale entertainment complexes in Cotai are currently under construction, we expect to see a further increase in the number of imported labour.

Meanwhile, savings by local residents has continued to rise. According to the AMCM statistics, the total savings by local residents rose to MOP 388.1 billion in June, 2013, up 23.4% y-o-y. On the back of the stronger capital flow coupled with the low interest rate environment, it is expected that local residents will remain active in the investment market. 

Alvin Mak, Associate Director, Research at Jones Lang LaSalle Macau, said, “We expect Macau’s property market will maintain steady growth in 2H13, benefited by the better-than-expected gaming revenue,  low interest rate environment, stronger capital flows in the market, and limited supply.”



The overall residential market, including both the sales and leasing sectors, was active in 1H13. However, the primary market slowed down after the Macau government launched the new ordinance on property pre-sale on 1 June. According to the DSEC statistics, a total of 7,600 residential transactions were registered in the period from January to June this year, down 3.8% y-o-y.

Six major projects were launched for pre-sale in 1H13, and out of which 1,700 units were estimated to have been sold. Meanwhile, 1,105 units are projected to be completed in 2H13.

Driven by the growing number of expatriate workers, the leasing market remained active with rents rising further in 1H13. High-end residential rents rose by 9.6% while mass and medium residential rents rose by 10.3% in 1H13. 

In addition, Jones Lang LaSalle’s Macau Residential Index reveals that in 1H13, capital values rose by 11.3% in the high-end residential sector and 16.1% in the mass and medium sector. The investment yields in both sectors reached 2.28% and 2.18% respectively.

The Government announced a series of new laws and regulations on the real estate sector in 2Q13, including a new ordinance on property pre-sale that imposes conditions on the sale of unfinished flats and regulates the sales procedures, and the Real Estate Agency Law. Affected by these new laws, the pre-sale of some of the residential projects may be possibly delayed. Considering the time required for going through the new procedures, which may lead to a change in the sales model of the secondary market, transaction volume in the secondary market is expected to see a decline in the short term. However, once the new laws and regulations are digested and adapted by the market, it is expected that the professional standard of the overall real estate industry will improve, resulting in a more efficient real estate market mechanism that can protect the interests of both the sellers and buyers.

Mr Jeff Wong, Head of Residential at Jones Lang LaSalle Macau, said, “We expect the residential market will continue on its upward trend under the low interest rate environment, stronger capital flows and limited housing supply.”



Driven by the ongoing construction of large entertainment complexes in Cotai, the business sentiment in Macau remains positive. A total of 988 new corporations were registered in Macau in 1Q13, rising 12.1% y-o-y and doubling the 6% growth for the whole of 2012.

In the sales market, the NAPE area was the most active, with rents rising to HKD 5,200 to 5,800 per sq ft gross. Due to the soaring rents, some investors decided to take a wait-and-see approach. Meanwhile, office stock available for sale declined significantly after the take-up for more than a year since the inflow of investment capital to the office sector in 2012. Despite the fall in office stock and the limited supply, the capital values for office properties still posted a stable growth of 17.2% in 1H13, with investment yields rising to 2.99%, according to Jones Lang LaSalle’s Macau Office Index.

In the leasing market, demand for offices mainly came from the gaming, hotel and real estate industries, which usually require a larger office area, ranging from ten to dozens of thousands of square feet. The overall rents recorded a 12.3% growth in 1H13. The continued growth of leasing demand resulted in a further drop in average vacancy rate. At the end of June 2013, the average vacancy rate in the office sector fell to around 12%, while the vacancy rate fell to less than 10% in Grade A office buildings.

On the supply side, it is expected that only one new Grade A office in Nam Van Lake Zone A will be completed within the next 12 months, adding a total of 280,000 sq ft of new office space to the leasing market.

‘Driven by the entertainment complexes in Cotai, the business environment in Macau will continue to be positive. The leasing demand, especially in the Grade A office sector, will continue to grow. Upon completion of the new Grade A office in Nam Van Lake, the demand-supply imbalance will be slightly alleviated.  We expect the Grade A office rents to remain stable or grow further in 2H13,” said Alvin Mak, Associate Director, Research at Jones Lang LaSalle Macau.



Macau’s retail sector continued to grow albeit at a slower rate. Retail sales recorded a growth of 16.6% y-o-y in 1Q13, lower than the 21.6% growth for the whole of 2012. Nevertheless, investors remained optimistic about the outlook of the retail sector, especially the business in the prime locations. For instance, Rua de S. Domingos recorded two large retail transactions at HKD 160 million and HKD 380 million respectively in 1H13.

Retailers continued to look for business opportunities in prime locations, which lent support to the rent hike. In prime locations, the unit rate of retail rental rose sharply to the range of HKD 500-1,500 per sq ft gross per month. High rents posed challenges to most retailers and consequently, only retailers with higher affordability were able to operate their businesses in the prime locations. Meanwhile, most retailers tended to be more conservative in making their rental offers and some retailers even started to change their leasing packages, opting to lease the shop units by paying a basic rent plus a turnover rent.

Nevertheless, according to Jones Lang LaSalle’s Macau Retail Index, capital values for retail properties increased by 17.9% in 1H13, while their average rents edged up by 3.5%. The investment yields fell from 2.7% to 2.3%.



In addition to the two retail transactions mentioned above, the market also recorded a notable site transaction for a price of HKD 250 million in the heart of Macau Peninsula. In the luxury residential sector, a top-floor unit in Tower 3 of One Central was transacted at HKD 150 million or HKD 18,292 per sq ft gross.

"We expect the growth of retail rents will slow down in 2H13 while capital values will maintain a steady growth. In the investment market, some investment funds and institutions are still actively looking for property investment opportunities, with particular attention on sites and en bloc buildings. Thus, we remain optimistic about the outlook of the property market in 2H13," said Gregory Ku, Jones Lang LaSalle’s Managing Director in Macau.