Henderson to resume sales of Conduit Road luxury flats

Henderson to resume sales of Conduit Road luxury flats
Relaunch comes a month after police raid on developer

Sandy Li
Aug 13, 2010
South China Morning Post

Henderson Land Development (SEHK: 0012), the developer being investigated by the government over the sales of luxury flats at its 39 Conduit Road development, is set to relaunch the project on the market.

The new sales campaign is expected to be low-key, with a company spokeswoman saying "the upcoming launch will probably not involve advertisements on television".

The relaunch comes a month after police raided the offices of Henderson Land over the cancellation of flat sales at 39 Conduit Road. The company stopped marketing of the project after the raid.

Henderson said in October it sold 24 luxury flats, one of them for as much as a record HK$88,000 per sq ft. Eight months later, it said 20 of the sales fell through, sparking accusations of market manipulation, and a government investigation.

The company has denied any wrongdoing but analysts say the saga has tainted the company's public image. Henderson has insisted the transactions were genuine. The sales were to shell companies, which Henderson said was a common practice.

The Commercial Crime Bureau seized documents related to the uncompleted sales at the luxury project in Mid-Levels. It has invited representatives of the developer to help with the investigation.

The flats involved in the investigation are not included in the new sales campaign, which has been heavily marketed to local real estate agents. "Most big property agencies were invited [to the relaunch]. Nearly 50 staff from our company alone attended the flat viewing," Louis Ho, a director at Centaline Property Agency, said.

Henderson Land, the flagship company of Lee Shau-kee, Hong Kong's second-richest man, has lost more than a tenth of its market value this year as it became the focus of government efforts to curb property prices.

The government said on June 18 that regulatory and law enforcement authorities would investigate the Conduit Road transactions. The company declined an invitation to appear before a July 12 Legislative Council panel meeting.

The controversy led to new rules governing flat sales. This week, the government said developers must make cancellations of flat purchases public within five working days of the sale contract being torn up. The company has not specified which flats will be included in the new sale campaign. But agents were given a tour of flats on the 12th, 20th, 38th and 61st floors.

"These floors have not been put up for sale before," Ho said.

After the tour, the agents were sent a price list for flats for between HK$27,396 per sq ft and HK$52,564 per sq ft. The prices were based on a list posted on the company's website in May before the controversy erupted.

"Prices are in line with the market level," Ho said, adding that the developer did not mention whether it would resell the 20 flats from the defaulted transactions. Buyers will have to put down a 20 per cent deposit within 30 days of signing the preliminary sale-and-purchase agreement, with the outstanding 80 per cent to be paid in 60 days.

Some agents predicted Henderson Land would release flats on lower floors to test the market response.

Terence Tong, a director at Centaline, said Henderson would probably ride on the positive market sentiment in a bid to get higher prices for the flats. "Buyers will only look at the prices, and their purchase decision will not be affected by the negative reports of the project," he said.