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Macau Property Opportunities shrugs off falling NAV – looks to future

Macau Property Opportunities results for the six months ended 31 December 2014 have been published. Over the period the fund’s net asset value fell by 3.6% to $4.71 on property valuations down 2.1% to $547.6m (on an IFRS basis, where assets held for sale are valued at the lower of cost and net realisable value, the net asset value fell by 9.6% to $2.48).

Macau has been hit by a crackdown on corruption in China which seems to have had an adverse effect on gambling revenue in the province. This has depressed sentiment in the local property market. They believe the main attraction of Macau is its status as the only place in China where gambling is legal. Six new casino resorts will open over the next three years, expanding the number of rooms by almost 50% to 42,500.

At their Waterside property, occupancy rates dipped to 62.7% but rents rose from HK$24.9 to HK$28.5 per square foot. They feel that hiking rents is more important than driving up occupancy at the moment.

At their Fountainside development they got their occupancy permit which will allow them to transfer 27 pre-sold units to the buyers which will bring in $19m, they still have 15 units to sell. They bought a luxury house and are exploring ideas to combine with one they’ve owned for a while, the Green House (for future reference, they’ll rename this Estrada da Penha). They are waiting for planning permission for a retail development, Senado square, but hope to get this by early 2016.

MPO : Macau Property Opportunities shrugs off falling NAV – looks to future

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