By Lynzy Valles,MDT
Copyright macaudailytimes
The phased withdrawal of satellite casinos in the city has become a central factor influencing the property market this year, with potential spillover effects on surrounding businesses and real estate assets.
According to JLL’s mid-year 2025 market review, the adjustment has added to investor caution at a time when the city’s broader commercial property recovery remains uneven.
“Macau’s external economic environment remains uncertain, and the local economy is still undergoing a gradual recovery. Consumer spending has yet to fully rebound, and the property market continues to recalibrate,” said Mark Wong, senior director of Value and Risk Advisory at JLL in Macau, in a statement released by the firm.
“The phased withdrawal of satellite casinos in the second half of the year has raised concerns over potential spillover effects on adjacent properties, contributing to a more cautious and observant investment environment,” he added.
Retail affected by
spending shifts
Retail property remains constrained by cross-border consumption patterns and the transition following satellite casino closures.
Total retail sales for the first half of 2025 dropped 9% year-on-year to MOP33.55 billion. Most categories saw declines except pharmaceuticals and motor vehicles.
Rental values dipped slightly by 0.3% compared with the end of last year, but capital values fell by 6.6%. Meanwhile, delinquency rates on commercial real estate loans rose to 5.4% by June.
An increasing number of distressed retail properties entered the market, some trading at discounts of more than 50% from peak levels. While tourist districts saw stronger leasing activity, neighborhood shops faced rising vacancy.
JLL said the market is likely to remain under pressure amid tight credit, ongoing macroeconomic headwinds, and the knock-on effects from the closure of satellites.
Hotel sector resilient
The hotel sector has strengthened on the back of a tourism rebound.
Visitor arrivals reached 19.2 million in the first half of 2025, up 14.9% year-on-year, with mainland Chinese tourists accounting for nearly three-quarters of the total. Of these, 71.6% came from mainland China, supported by strong growth in Individual Visit Scheme (IVS) entries.
As of mid-year, the city’s hotel room supply reached nearly 43,900, with occupancy averaging 89.1% and visitors staying an average of 1.7 nights. Wong said strong performance in this segment is drawing continued investor attention.
“Nonetheless, the strong performance of Macau’s gaming and tourism sectors has enabled the hotel industry to retain its competitive edge, particularly in terms of room rates and occupancy levels,” he said.
“This has reinforced the appeal of hotel assets as a compelling investment proposition. A notable example is JLL’s brokerage of The 13 Hotel transaction in the first half of the year.
At present, hotel yields in Macau remain relatively stable. Both domestic and international investors may view this adjustment period as a strategic entry point for medium- to long-term asset allocation.”
Residential slowdown
The residential market, by contrast, has shown weaker momentum. Transaction volume fell by 13.1% year-on-year to 1,671 units in the first half of the year, according to the Financial Services Bureau.
Pre-sale deals also declined by 11%, totaling just 170 units.
New supply was limited, with nine projects offering 462 homes, most of them small- to medium-sized developments on the Macau Peninsula. While some projects such as Lake YOHO recorded healthy take-up, broader market sentiment remains subdued.
Capital values have continued to fall, with high-end residential prices down 9.6% compared with the end of 2024 and mass residential properties down 7.9%. Rental performance also diverged, with high-end flats rising slightly while mass rentals fell sharply.
Analysts said the slowdown reflects weaker demand amid limited population growth and cautious investment appetite, trends compounded by uncertainty over casino-related assets.
Offices under pressure
JLL’s data show that the city’s office sector remains in a downturn as office rental values declined 3.4% year-on-year, with Grade A office rents dipping slightly by 0.9% in the first half of the year.
Vacancy rates climbed to 14%, reflecting a subdued business environment.
Capital values also slipped, down 4.1% overall and 0.7% for Grade A properties. Yields were reported at around 3% to 3.2%.
Most leasing activity was driven by renewals rather than new demand. Some international firms downsized or shifted back-office operations to cheaper retail premises, while others divested assets to free capital.
JLL projected that continued cost-cutting among tenants, paired with new supply, will likely keep pressure on the sector in the months ahead.
For JLL, the property market remains uneven, with tourism-driven gains in hotels offset by softer conditions in the residential, office, and retail sectors.
Wong said investors are keeping a close eye on the adjustment process, concluding, “The property market continues to recalibrate,” pointing to the dual role of tourism recovery and casino restructuring in shaping near-term sentiment.
