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Thursday, 27 November 2008
SHKP to offer luxury project at steep discount
Sun Hung Kai Properties plans to offer its luxury low-density residential project in Sha Tin at 35 per cent less than a nearby project, reflecting growing fears of a slump that will see volumes this month plunge to a 20-year low.
Sun Hung Kai Properties plans to offer its luxury low-density residential project in Sha Tin at 35 per cent less than a nearby project, reflecting growing fears of a slump that will see volumes this month plunge to a 20-year low.
As the first new project to go on sale since the collapse of Lehman Brothers Holdings in September, the sales response would offer clues to the strength of the primary market, analysts said.
SHKP said it would release 20 units at Peak One tomorrow at about HK$7,366 per square foot and would offer buyers up to 500 days to complete the transaction.
Prices for the first batch are between HK$12.67 million and HK$20.79 million each, or HK$6,801 to HK$8,011 per square foot. The prices are 35 per cent lower than an adjacent project, Great Hill, built by KWah International Holdings.
To compete for buyers, KWah last Friday reduced prices for two penthouses at Great Hill to HK$10,000 per square foot, 3.8 per cent lower than the launch.
“We have adjusted our target price because we recognise that the global financial crisis has affected Hong Kong’s residential market. We intend to offer the first batch at attractive prices to draw buying interest,” said Victor Lui Ting, an executive director of Sun Hung Kai Real Estate Agency.
Mr. Lui expects SHKP will generate about HK$2 billion from the sale of 150 units this year.
With property prices off as much as 30 per cent for the past six months, agents said SHKP had revised downwards its target price 47 per cent from its goal of HK$14,000 per square foot earlier this year.
Agents believed the move would drag down high-end residential project prices in Sha Tin only, because it was not seen as a district for luxury developments.
SHKP will also announce today sale details for a mass residential project, the 542-unit La Grove, in Yuen Long. The developer earlier said prices for the units would be less than HK$2 million each.
The planned sale of the two projects comprises about 950 units.
The projects are being launched at a time of market weakness, with Midland Realty estimating property transactions will tumble to 3,800 this month, the lowest since July 1989, when it fell to just 2,290 deals.
“The provisional figure is far below the 5,090 deals recorded during the Sars period in 2003,” said Midland chief analyst Buggle Lau Ka-fai.
Nicole Wong, the head of China property research at CLSA, said homebuyers would be more cautious in an economic downturn. “The quoted price [of Peak One] is not what we will call severely depressed.”
Eric Yuen Chi-fung, the head of research at Dao Heng Securities, said he believed it would be tough to sell units costing between HK$10 million and HK$20 million while the global crisis was deepening. “The project is unlikely to draw a stunning response because the crisis has hit the target buyer market the hardest.”
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SHKP to offer luxury project at steep discount
Sandy Li
27 November 2008
Sun Hung Kai Properties plans to offer its luxury low-density residential project in Sha Tin at 35 per cent less than a nearby project, reflecting growing fears of a slump that will see volumes this month plunge to a 20-year low.
As the first new project to go on sale since the collapse of Lehman Brothers Holdings in September, the sales response would offer clues to the strength of the primary market, analysts said.
SHKP said it would release 20 units at Peak One tomorrow at about HK$7,366 per square foot and would offer buyers up to 500 days to complete the transaction.
Prices for the first batch are between HK$12.67 million and HK$20.79 million each, or HK$6,801 to HK$8,011 per square foot. The prices are 35 per cent lower than an adjacent project, Great Hill, built by KWah International Holdings.
To compete for buyers, KWah last Friday reduced prices for two penthouses at Great Hill to HK$10,000 per square foot, 3.8 per cent lower than the launch.
“We have adjusted our target price because we recognise that the global financial crisis has affected Hong Kong’s residential market. We intend to offer the first batch at attractive prices to draw buying interest,” said Victor Lui Ting, an executive director of Sun Hung Kai Real Estate Agency.
Mr. Lui expects SHKP will generate about HK$2 billion from the sale of 150 units this year.
With property prices off as much as 30 per cent for the past six months, agents said SHKP had revised downwards its target price 47 per cent from its goal of HK$14,000 per square foot earlier this year.
Agents believed the move would drag down high-end residential project prices in Sha Tin only, because it was not seen as a district for luxury developments.
SHKP will also announce today sale details for a mass residential project, the 542-unit La Grove, in Yuen Long. The developer earlier said prices for the units would be less than HK$2 million each.
The planned sale of the two projects comprises about 950 units.
The projects are being launched at a time of market weakness, with Midland Realty estimating property transactions will tumble to 3,800 this month, the lowest since July 1989, when it fell to just 2,290 deals.
“The provisional figure is far below the 5,090 deals recorded during the Sars period in 2003,” said Midland chief analyst Buggle Lau Ka-fai.
Nicole Wong, the head of China property research at CLSA, said homebuyers would be more cautious in an economic downturn. “The quoted price [of Peak One] is not what we will call severely depressed.”
Eric Yuen Chi-fung, the head of research at Dao Heng Securities, said he believed it would be tough to sell units costing between HK$10 million and HK$20 million while the global crisis was deepening. “The project is unlikely to draw a stunning response because the crisis has hit the target buyer market the hardest.”
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