REG - Macau Prop Opp Fund - Investor Update H1 2025

Macau Property Opportunities FundAnnouncement

Yesterday 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250710:nRSJ4486Qa&default-theme=true

RNS Number : 4486Q  Macau Property Opportunities Fund  10 July 2025

Macau Property Opportunities Fund Limited

 ("MPO" or the "Company")

 

  Investor Update H1 2025

 

KEY DATA

 Inception date               5 June 2006
 Exchange                     London Stock Exchange
 Domicile                     Guernsey
 Market capitalisation         £14.9 million
 Portfolio valuation          US$112.7 million1      -7.5%

                                                     (vs 31 December 2024)
 Adjusted NAV                 US$47 million1
 Adjusted NAV per share       US$0.76 1/55 p2        -17.6%

                                                     (as disclosed in 2024 H2)
 Share price                   24.1 p                -3.6%

(vs 31 December 2024)
 Discount to Adjusted NAV     56%                    70%

                                                     (as disclosed in 2024 H2)
 Cash balance                 US$2.2 million1
 Total debt                   US$63.4 million1
 Loan-to-value ratio          55.2 %1

 1  As at 31 March 2025.

2 Based on a US$/£ exchange rate of  1.371997 as at 30 June 2025.

All other data are as at 30 June 2025.

 

 

Opening Paragraph

The Company made further progress with divestments in H1 2025 despite the
effect on sentiment of rising tensions over US-China trade tariffs. The
recovery of gaming and tourism has stabilised while uncertainty continues to
loom over the domestic property sector.  Four sales at The Waterside were
achieved, and the Company exchanged contracts for the sale of another villa at
The Fountainside. The gross sales proceeds since the divestment programme
commenced in mid-2022 stands at HK$800.1 million (c.US$102.3 million).

 

Portfolio

The Waterside

The Company achieved new sales of four standard units at The Waterside for a
total consideration of HKD 61.8 million (US$7.9 million) in H1 2025, with
three units subject to completion in Q3. Negotiations continue on other units
which have yet to convert to reportable sales. As a result, in total, 36 units
have now been sold since the divestment programme began in mid-2022, with 23
units remaining available for sale as of 30 Jun. As a significant number of
prospective purchasers have expressed a preference for tenanted units, pending
their sale, a number of the remaining units are leased on a short-term basis
reflecting an occupancy rate of 42% of the total available gross floor area,
with rents at an average of HK$18.36 (US$2.33) per square foot per month.
Further sales are being negotiated in what continues to be challenging
conditions for the Macau real estate market.

 

The Fountainside

At The Fountainside, the Company sold an additional villa together with its
car-parking space for a total consideration of HK$14.5 million (c.US$1.85
million). The sale is scheduled for completion in Q3 2025. With this sale,
three out of the development's four villas have now been sold, and active
discussions are in progress with prospective purchasers on the final villa.

 

In addition, the three reconfigured apartments and two car-parking spaces
remain available for sale. The sales effort has been hampered by continuing
challenges in obtaining approvals for newly built parking spaces as part of
the reconfiguration exercise. The Company continues to pursue the resolution
of these bureaucratic issues.

 

Penha Heights

Penha Heights, located at the top of the exclusive and historic Penha Hill, is
among the top homes in Macau. The Company's marketing approach for the
property includes tapping the regional client network of ultra-high-net-worth
individuals of a Hong Kong-based firm of specialist property agents.

 

Although these efforts have led to ongoing viewings by potential purchasers,
they have not yet resulted in firm offers. However, the Company remains in
proactive discussions with several interested parties to facilitate a sale of
Penha Heights.

 

 

Property

 

Macau's property recovery loses momentum

Although the Macau property sector had demonstrated a nascent recovery in 2024
driven by interest rate cuts and changes in government policy, the market had
lost its momentum by the first quarter of 2025. During that period, the
residential sector saw declines in terms of both transaction volumes as well
as prices - 754 residential property sales were recorded, which represented a
drop of 130 transactions or 15% lower quarter-on-quarter (QoQ). In terms of
value, the drop was sharper with the total transactions value falling 27% QoQ.
 Overall average prices in the first quarter were 6% lower QoQ.

 

Existing residential units were worse hit than new homes offered by developers
with the volume of transactions 18% lower QoQ while total transactions value
recorded a steep fall of 29% QoQ.  Nevertheless, in April, the residential
property market appeared to have stemmed the decline. Sales volumes had
increased 19.9% MoM while prices rose slightly by 1.5% MoM. New approvals of
residential mortgage loans had also increased 7.2% MoM in March.

 

On the other hand, rental yields for residential properties had surged to a
three-year high in the first quarter of 2025 with a 4.5% increase YoY.

 

Luxury market tracks overall sector performance

In the luxury residential segment, the volume and value of transactions have
largely tracked the overall market.  The number of sales transactions
expanded in the later part of 2024 in response to the policy changes in Macau
as developers rushed to offload inventories at attractive prices resulting in
a 67% increase in transactions over 2023's dismal numbers. However, by the
first quarter of 2025, the increase had fizzled out with only 53 sales
transacted, representing a QoQ decline of 17%.

 

 

Macau

Economy

Following the post-pandemic boom, Macau's economic growth has moderated in the
face of economic headwinds and volatility. The territory's full year Gross
Domestic Product (GDP) for 2024 registered YoY growth of 8.8% to reach
approximately 86.4% of pre-pandemic levels, but this was lower than analyst
forecasts of over 10% growth.

 

For the first three months of 2025, global economic uncertainties had dampened
Macau's economy. In addition, post-pandemic, the territory's economic engines
- tourism and gaming - have continued to undergo significant shifts in visitor
spending and consumption patterns, preferences and demographics, impacting its
GDP. Macau's first quarter GDP contracted by 1.3% YoY compared to 3.4% in the
preceding quarter, and relative to the pre-pandemic levels, Macau's economy
stood at 85.2% of pre-pandemic GDP for the corresponding period in 2019.

 

Nevertheless, Macau's economy continues to be powered by stronger performance
in tourism and gaming while being backed by stable public finances. It is
therefore on a good footing to weather the challenges and uncertainties in the
global and regional economic outlook and weaknesses in the local economy.

 

Tourism and gaming

Total visitor arrivals for the first quarter of 2025 reached approximately 9.9
million, which was 11% higher YoY. Despite the increase in visitor arrivals,
Macau's tourism exports for the period had decreased by 3.4% YoY and spending
per visitor had experienced a 13% decline. This has been attributed to
dampened consumer confidence in mainland China and an increase in leisure
visitors and lower value gaming visitors.

 

As at end-April, cumulative gross gaming revenue (GGR) for the first four
months of 2025 stood at MOP76.5 billion (US$9.3 billion), an 0.8% increase
YoY, or 32% of the full-year target set by the government and falling short of
the 6% annual growth target. These values represent approximately 80% of
pre-pandemic levels in 2019. It is expected that the weak GGR figures may also
be partly due to seasonal weakness, and analysts expect the revenues to
improve in the coming months.

 

Outlook

Although Macau's economy remains resilient, it is not immune to global and
regional volatility. As a result, the International Monetary Fund has halved
its 2025 growth forecast for the territory's economy to 3.6% YoY. This
downward revision reflects the slowing economic growth globally which had been
hindered by rapidly changing policy shifts and the resulting uncertainties.

The slowing growth environment and climate of uncertainty had led Jones Lang
LaSalle Macau to forecast that residential property prices in the territory
are likely to see a decline of up to 5% in 2025 due to oversupply and subdued
demand. Additionally, the loan-to-deposit ratios for both Macau residents and
non-residents at local banks have also seen declines as at the end of the
first quarter of 2025. This indicates a lower appetite for new mortgages,
reflecting a cautious approach amid current economic uncertainties.

 

In the light of these challenges, the Company's disposal timelines have also
been similarly impacted. As a consequence, this has necessitated deeper
discounts to deliver ongoing sales, meet operating obligations and comply with
banking covenants and loan-to-value ratios. Nevertheless, the Company remains
committed to continuing its divestment programme to meet its debt repayment
schedule and return capital to shareholders.

 

About Macau Property Opportunities Fund

Premium listed on the London Stock Exchange, Macau Property Opportunities Fund
Limited (http://mpofund.com) is a closed-end investment company registered in
Guernsey and is the only quoted property fund dedicated to investing in Macau,
the world's leading gaming market and the only city in China where gaming is
legalised.

Launched in 2006, the Company targets strategic property investment and
development opportunities in Macau. Its current portfolio comprises prime
residential property assets.

The Company is managed by Sniper Capital Limited (http://snipercapital.com/) ,
an Asia-based property investment manager with an established track record in
fund management and investment advisory.

 

Stock Code

London Stock Exchange: MPO

 

LEI

213800NOAO11OWIMLR72

 

 

For further information:

 

Manager

Sniper Capital Limited

Group Communications

Tel: +853 2870 5151

Email: info@snipercapital.com (mailto:info@snipercapital.com)

 

 

 

Corporate Broker

Panmure Liberum

Darren Vickers

Tel: +44 20 3100 2222

 

Company Secretary & Administrator

Ocorian Administration (Guernsey) Limited

Kevin Smith

Tel: +44 14 8174 2742

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  PFUPKCBNKBKBDOK