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Having experienced a tragic plunge in its property market in 2H08 due to the global credit crunch, Macau’s residential sector has shown signs of improvement since March. The capital values for both high-end and mass residential sectors returned to the positive regime and recorded growth in 1H09, according to Jones Lang LaSalle in its Macau Mid-Year Property Review today.
Macau’s GDP recorded negative growth for two consecutive quarters, falling by 7.6% y-o-y in 4Q08 and 12.9% y-o-y in 1Q09, respectively. The contraction in 1Q09 is the largest fall in the past ten years. Net exports of services, mainly gaming receipts and tourism spending, saw negative growth in 1Q09. However, Macau’s private consumption expenditure presents a different picture, recording a positive growth of 3.4% y-o-y in 1Q09, albeit at a slower pace when compared with the 9.4% y-o-y growth in 4Q08.
The global economic slowdown, including that in China, has negatively affected Macau’s gaming revenue. In 1H09, Macau’s total gaming revenue decreased by 13.4% y-o-y to only MOP 51.3 billion. Nevertheless, on an absolute level basis, the city’s gaming revenue still maintained a good level when compared with the pre-2008 levels.
Macau’s tourist sector was also negatively affected. Total visitor arrivals to Macau decreased by 11.4% to 10.3 million during 1H09. Its tourism receipts were recorded at MOP 3.46 billion in 1Q09, down 7.3% y-o-y.
Alongside the Cotai Strip, amidst the suspension of Las Vegas Sands’ projects, another brand-new entertainment complex ‘City of Dreams’ partially opened in June 2009. Developed by Melco Crown Entertainment Limited, this project is made up of different elements, including hotel rooms, serviced apartment units, a casino, a shopping arcade and a theatre. One of the hotels, part of the shopping arcade and the theatre are scheduled for completion by the end of this year.
Meanwhile, China decided to set aside a site of approximately 5 sq km at Hengqin to establish the Guangdong-Macau Cooperative Zone. Out of which, about 1.1 sq km will be allocated for building a new campus for Macau University. Outside this zone, a 1,325-sqm site in the southeast of Hengqin was granted to Chimelong Group in December 2008 for 40 years, where a theme park will be built. The entire project will be completed in two phases in 2010 and 2012, respectively.
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