Non-residential investments

So far we have been discussing residential investments, any thoughts on non-residential investments? Clearly this is an area where transactions will take over (unless a new form of SSD affects this market). What are your views on


1) Car parks (yields getting compressed from norms of 5%+, is it as risk free as it seems? or even as liquid if times changed)


2) Office space and the increasing number of confirmer sales announced


3) Warehouses/ Retail shops (very low yielding, all capital appreciation punts respectively, any particular areas to benefit?)


4) Advertisment signs or any other form of alternate investments, I haven't done any research into this category.

Some thoughts.


As a general proposition, non-residential properties tend to have lower ourgoings for repairs etc and lower turnover of tenants but when they are vacant, the vacancy can take longer to fill.


1. carparks: we have two (attached to flats we own). When the tenant wants the carpark, that's fine. When the tenant of the flat does not want a carpark, they are difficult to rent out


2. no experience in this area


3. our one investment in this area has been excellent. I regret not buying more but think that yields are too low to be attractive right now.


4. a friend had been buying farmland in NT. No yield to speak of but viewed as something that will eventually by sold to a developer.

A WORD TO TO WISE


... or actually a quote, from pg.7 of LuxeHomes (Ask the Expert, Jeffery Ng Chong-yip)


"The risk of investing in car park spaces is connected to the economy. In good times, a couple with high disposable income may want to own a car. But the car is usually the first thing to be abandoned in bad times."

(see the latest = What happened to those wonderful Car park investments):


Here's one of the Worst:


From an article in The Standard:


. . .

The sentiment for Hong Kong Garden is the most disastrous, said Billy Cheng Chi-kuen, Midland Realty sales manager for the area.


"Around 600 car parking spaces at the estate were sold by the developer but none could be resold in the secondhand market," Cheng said.


Another 400 to 500 parking spaces are lying vacant, whereas before the developer's mass offload there were less than 100 on the secondhand market.


The supply glut at Hong Kong Garden has dragged rents down to as little as HK$400 per month, compared with the HK$1,800 charged by Chinachem before. It is even lower than the HK$900 rent charged at a nearby temporary car park.


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/see: http://www.thestandard.com.hk/news_detail.asp?we_cat=16&art_id=134137&sid=39736021&con_type=3&d_str=20130530&fc=7