According JLL’s latest Hong Kong-Zhuhai-Macao Bridge and Beyond: Mobility, Connectivity and Collaboration research study, both Hong Kong and Macao will soon benefit from improved transport links in the region.
With the new Hong Kong-Zhuhai-Macao Bridge and other strategic infrastructure projects in the Pearl River Delta, both the city’s economic development and the local retail, hotel and industrial property markets are set to take advantage.
Tourist numbers across the region are expected to receive a boost with cross-border travel becoming more efficient, benefitting the retail and hotel sectors. Hong Kong’s industrial market will benefit from the Hong Kong-Zhuhai-Macao Bridge as more goods are transported to Hong Kong for export. The impact on the residential and office markets, on the other hand, will be less pronounced.
The Hong Kong-Zhuhai-Macao Bridge is expected to boost tourist arrivals, as the ease of access between cities allows for increased experiences for visitors. JLL estimates that there will be 420,000 more mainland tourist arrivals to Hong Kong per year by 2020, as a result of the bridge. Coupled with the Guangzhou-Shenzhen-Hong Kong Express Rail Link, an additional 2.1 million visitors are expected per year. The continuous growth in the number of visitors to Hong Kong will bring strong support to the local retail industry.
Denis Ma, Head of Research at JLL Hong Kong said, “Using the 2017 average spend on shopping and dining by a mainland visitor of HKD 3,400 (USD 430), an additional HKD 7.1 billion in retail turnover per year can be expected in Hong Kong from increased tourist activity.”
To cater for the influx of visitors, approximately 12,400 additional hotel rooms are expected to be delivered in Hong Kong between now and 2022. Central, Wanchai and Causeway Bay will see the highest amount of supply, with approximately 4,200 rooms projected to be built. This should provide solid retailing demand in those established shopping neighborhoods.
The bridge will significantly improve connectivity between Hong Kong and the western region of the Pearl River Delta. The improvement in efficiency of transporting cargo to Hong Kong will drive increased demand for industrial warehouse space in the city.
Kwai Chung, Tuen Mun and Hong Kong International Airport are the areas that will most benefit, as the bridge will allow for more manufactured goods to be easily transported through Hong Kong for export. However, the full effects on the Hong Kong industrial property market will not be realized for a number of years, as the manufacturing industry on the west bank of the Pearl River Delta is not as developed as other areas in the region.
The bridge has the potential to be a major contributor to achieving Macau’s ambition to be a world centre for leisure and tourism. Tourist arrivals from Hong Kong to Macau is expected to rise, which will increase gaming revenues and MICE (Meetings, Incentives, Conferences and Exhibitions) events.
Apart from hotel and casino businesses, the major beneficiary from the bridge will be the retail sector in Macau with the influx of tourist arrivals driving stronger retail turnover in the city.
Gregory Ku, Managing Director at JLL in Macau and Zhuhai tells World Property Journal, “Much of the retail space in the casinos is occupied by high-end brands at present. The retail offering in Macau is likely to transition more towards mass market retail including major fast fashion brands as the city tries to attract a broader range of tourists.”
Zhuhai and Surround Markets
The bridge has the potential to boost economic activity in Zhuhai and other parts of the western bay area significantly. The western areas of Guangdong province have lagged in terms of attracting business investment compared to Shenzhen and Guangzhou. The bridge will likely change this situation. Zhuhai, Zhongshan and Jiangmen all have the opportunity to position themselves as lower cost options, considering average wages in these cities can be up to 25% cheaper than Shenzhen. The bridge will further this argument as it will significantly improve access to Hong Kong’s business/financial services sector and also its trade infrastructure.
The industrial property sector in this region will be one of the key beneficiaries if manufacturing businesses move into the area. Demand for office space will also increase as more economic activity occurs.
Denis concluded, “In the short run, increased tourist arrivals are set to benefit Hong Kong and Macau as visitors are drawn to the different experiences offered by each destination. Longer term, the further development of western Guangdong will be beneficial for Hong Kong through increased trade and business activity. The true value of the bridge may not be apparent until 10 years, if not longer. However, the project is certain to contribute to the future prosperity of the Greater Bay Area, particularly with other major infrastructure projects being delivered in the coming years.”
Source From: http://www.worldpropertyjournal.com