The ongoing US financial meltdown may have prompted some distressed investment banks to sell their properties in Hong Kong and that may be a good opportunity for property funds and institutional investors to buy at a "nice" price, says a property agency.

Colliers International Executive Director Antonio Wu said that it is an appropriate time now for property funds to look for acquisition.

"The investment (property) market is still consolidating amid the US financial turmoil... many investors endeavor to grasp the market downturn for bottom-fishing," he said.

A considerable amount of residential and office spaces were up for sale as a result of the ripple effect of the collapse of Lehman Brothers.

Market speculated that Lehman Brothers' management is rushing to offload its HK$200-million properties in Hong Kong, which includes a mid-range apartment building called The Arch and a high-end condo named The Celestial Heights.

A property fund under Merrill Lynch was rumored to have put up a bunch of retail properties worth some HK$2 billion for sale earlier.

Also, some landlords of ICC, a commercial high-rise on top of Kowloon MTR station funded by investment banks, have allegedly slashed their asking rents by 7 percent because of the bearish market.

However, Wu noted that liquidators are unlikely to bundle the Lehman Brothers property assets in Hong Kong for a bulk sale because many of them were developed in the form of joint venture.

"The properties are bound by rental contracts," he said.

Allan Lee, head of an asset management company, said that the company is looking for sensible items to buy when the time is right, since commercial property prices have dropped significantly in recent months.

"We keep an eye on the market changes and we're going to take action if the timing is appropriate," he said.

However, Macquarie Goodman Asia (MGA), an industrial property arm of Macquarie, said that it has no plan to purchase any property that troubled investment banks are selling.

Daniel McDonald, managing director (Hong Kong) of MGA, said that the company is focusing on developing industrial properties. He said that it will not tap into the investment bank's assets because most of them are commercial and residential.

(HK Edition 09/26/2008 page2)