Jones Lang Lasalle | Hong Kong | Macau's high-end residential market remained active in the first quarter of 2006 amid the robust economic growth and improving employment prospects, reports Jones Lang LaSalle in its latest Greater China Property Index.

Macau's economy grew by 18% during the first quarter of 2006,
bringing the full-year growth to 12%. Gross fixed capital formation
surged by 56.9%, expenditure by non-residents increased by 6.2% and
gaming receipts rose by 8.3% year-on-year.

At an industry level, visitor arrivals in Macau in 2005 totalled 18.7
million, those from Mainland China, Hong Kong and Taiwan jumped by
9.8%, 11.2% and 15.2% respectively. Retail sales grew hand in hand with
the flourishing tourism sector. Total retail sales in 2005 expanded by
16.8%, with tourist-oriented retailers posing the strongest growth.
Strong economic growth would benefit the development of various
property sectors.

The ongoing construction of new gaming and tourism facilities have
brought in a surge in labour demand and foreign workforce.  As at the
end of January 2006, Macau's imported workforce increased by 54.2%
year-on-year to 42,496, with the number of Hong Kong residents working
in Macau soared by 561% year-on-year to 7,540.

The employment market continued to improve alongside the opening of new hotels and tourism facilities. The unemployment rate stays at 3.9%. A number of projects in the pipeline and final preparations are underway,
and are ready for opening later this year.  With better job prospects,
residents became more confident in property purchase.  End-user demand seemed to have increased, demand is particularly strong among the young casino workers.

'Sentiment has been improving since mid-2005.  The secondary market
has gathered steam with increases in sales transaction volume, as the
market put more focus in the secondary market while there was a lack of
new launch during the first quarter of 2006,' remarks Mr Kenneth
Tsang, Head of Research, Greater China (South) at Jones Lang LaSalle.
The high-end market broadly followed the trend of the mass market.
Investors were keen to secure investment opportunities.  Overall,
capital value edged up by 1% during the quarter.

Leasing demand for high-end properties surged with the influx of
expatriates, particularly the senior expatriate executives with
casino/hotel groups.  Mid-market apartment units were also sought after
by middle management staff.  Average rent for high-end residential
properties went up by 1.5% during the quarter.

The future influx of white-collar casino expatriates into Macau will
set a strong demand base for medium- to high-end residential
properties, either by way of leasing or purchases. They can potentially
absorb up to 40 to 80% of the new supply of new condos by 2009.