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Sale brings in HK$8b for firm, partners as demand stays strong
Sun Hung Kai Properties Ltd, the world’s biggest developer by market value, has sold 300 flats at an apartment project in Hong Kong’s Island South district over the past two weekends.
The sale at the Larvotto project has brought in a total of HK$8 billion (S$1.4 billion) in revenue for Sun Hung Kai and partners Kerry Properties Ltd and Paliburg Holdings Ltd, Victor Lui, an executive director at Sun Hung Kai’s agency arm, said in an e-mailed statement yesterday.
The developers will offer another 64 apartments for sale this week, Mr Lui said.
Demand for luxury homes in Hong Kong remains strong even as the government tries to curb a 38 per cent surge in home prices since the beginning of last year amid concerns that housing is becoming unaffordable.
Luxury property prices may rise 20 per cent this year on a lack of supply and low interest rates, property broker Jones Lang LaSalle Inc said in a report last week.
‘The atmosphere is very hot,’ said Louis Chan, managing director of residential sales at Centaline Property Agency Ltd.
‘There’s a lot of momentum in both new and used home markets.’
Apartments at Larvotto, which have been selling for an average of HK$30 million, will be around 1,500 square feet to 2,500 square feet.
Larvotto is the name of the main public beach in Monaco.
Larvotto has a total 715 units. Hong Kong developers sell units in developments in batches instead of offering them all at once, to gauge demand and take advantage of rising prices.
There were 86 used-home transactions at 10 of Hong Kong’s biggest private housing complexes over the weekend, little-changed from a week earlier, Mr Chan said.
Source : Bloomberg – 27 Jul 2010
Sun Hung Kai to Sell 50 More Flats Following Demand
The company sold the apartments at its Larvotto project at an average of about HK$40 million ($5.14 million) per unit, bringing in about HK$4 billion in revenue, Sun Hung Kai said in an e-mailed press release late yesterday. The new batch may go on sale in the middle of this week, it said, adding that their average sale prices may be 2 percent higher.
“The price is reasonable for properties of this quality,” Eva Yeung, an agent at Centaline Property Agency Ltd. who bought a HK$47 million-unit on behalf of a Hong Kong-based client, said outside the project’s showroom at the International Financial Center building in the Central business district on July 17.
Yeung said the luxury property market in Hong Kong will be supported by the lack of supply and increased demand from Chinese buyers. That may counter Hong Kong government efforts to curb a 38 percent surge in home prices since the beginning of 2009 amid concerns housing is becoming unaffordable.
About 20 percent of the buyers over the weekend were from mainland China, Sun Hung Kai said.
“Demand has exceeded supply,” Victor Lui, an executive director at Sun Hung Kai’s agency arm, said in the press release. “All of the units were sold within the first few hours after sales began.”
Robust Prices
Sun Hung Kai fell 0.3 percent to HK$111.50 at the 4 p.m. close of trading in Hong Kong. The Hang Seng Property Index that tracks the performance of seven Hong Kong developers dropped 0.4 percent.
Sun Hung Kai and partners Kerry Properties Ltd. and Paliburg Holdings Ltd. last week announced they were putting the apartments in the Ap Lei Chau district project up for sale for between HK$15,811 and HK$$22,500, a record for the district.
The second-hand market for Bel-Air, a luxury project in the nearby Pokfulam district, is selling for “similar prices” to Larvotto, according to Buggle Lau, chief analyst at property agency Midland Holdings Ltd. New developments in the area will probably sell at a minimum of HK$15,000 a square feet, he said.
Luxury residential prices in the Island South district, which includes Repulse Bay and Stanley areas, grew 2.5 percent in the second quarter, after rising by nearly 35 percent in the previous nine months, according to property consultant Knight Frank LLP. Luxury homes are those at least 1,000 square feet (93 square meters) or costing at least HK$10 million.
Apartments at Larvotto will be around 1,500 to 2,500 square feet. Larvotto is the name of the main public beach in Monaco.
Larvotto has 715 units. Hong Kong developers sell units in developments in batches instead of offering them all at once, to gauge demand and take advantage of rising prices.
Hong Kong authorities have introduced rules on new home sales and are investigating canceled sales at a Henderson Land Development Co. luxury apartment project.
Henderson last month canceled 20 transactions at its 39 Conduit Road project in the city’s Mid-Levels district, including the one the company claimed would fetch a record HK$88,000 a square foot, prompting lawmakers to call for an investigation.
The city’s Legislative Council on July 12 held its first special meeting to discuss the collapsed sales, which were worth HK$2.67 billion according to Henderson.
Since last year Hong Kong has raised the requirement for down payments on luxury homes and cracked down on misleading marketing by developers, including the use of show flats, after officials expressed concern that prices were rising too fast.
Hong Kong builders often sell apartments before they are completed, enticing customers by showing walk-through models of the homes.
Parkview Eclat
Hong Kong Parkview
--Editors: Malcolm Scott, Andreea Papuc
