Property assets include bungalows, townhouses, apartments, condominiums and now…parking spaces. In a city where space limitation is extreme, like Hong Kong, one particularly coveted parking space has a hefty price tag of USD640 000. You can buy 14 Toyota Camrys in Hong Kong with that money. The filthy, tiled lot measures only 128sqf, which makes its per square feet cost a staggering USD5000!
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| Crummy yet costly piece of property image source: cnn.com |
The pricey but rather unglamorous piece of property belongs to Jacinto Tong, CEO of Gale Well Group, a property company that possesses countless properties across Hong Kong. But he is more renowned for being “the tycoon of parking spaces”. If Tong sells the parking space and one other that he owns, he would make an easy USD1.3 million. He is not in a rush to sell, though, because it only takes him 20 steps to reach the office and the elevator from the coveted lot.
Colliers International, the international property services firm, conducted a Parking Rate Survey recently and discovered that Hong Kong has the most inflated parking fee in the Asia-Pacific region. The median in 2011 was USD744.72 per month. The high cost is attributed to governmental restrictions on the residential market, which has been a series of strict policies since 2010 intended to curb inflation of property prices. The side effect is a sway towards commercial properties, which includes parking lots. Residential property transactions has fallen by 31% while parking lot transactions has increased by 25%, to a value of USD751 million. Fast capital appreciation and high rental yields, about 5%, have made parking lots a desired addition to any investment portfolio.
However, some property analysts advise caution. When an economy slows down, the first thing that people do are to sell their cars. And a parking space that is not in use is simply a grimy piece of concrete.
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