Two property sites in Hong Kong – one in Lantau and the other in Hung Hom – have fetched far lower prices than earlier predicted, surprising many real estate experts.
A 24,326 sq ft residential plot in Mui Wo, Lantau was sold to Sino Land for HK$55 million (S$9.16 million) or HK$1,113 (S$185.30) psf. The lowest estimate for the area was around HK$84 million (S$13.99 million).
In another sale, a 168,165 sq ft hotel site at the junction of Wa Shun Street and Hung Luen Road in Hung Hom was sold to Shangri-La Asia for HK$2.33 billion (S$387.91 million) or HK$3,461 (S$576.20) psf. The lowest estimate for the site stood at about HK$3.32 billion (S$552.73 million).
“The prices are simply too low. I wonder which price benchmark the government has used to set such low reserve prices for the two plots,” said Vincent Cheung Kiu-cho, Director for Valuation at Cushman & Wakefield.
"This could mean that government is even more pessimistic than the developers on the property market,” he said.
Cheung added that the government reserves the right to withdraw a plot sale if they are not satisfied with the purchase price.
Shangri-La Asia, led by Robert Kuok Hock Nien of Kerry Group, outbid three larger rivals including Sun Hung Kai Properties, Sino Land and Cheung Kong Holdings for the Hung Hom plot. A neighbouring commercial plot spanning 147,499 sq ft was sold to Wheelock for HK$6,827 (S$1,137) psf in August.
Related Stories:
S’poreans love affair with London to continue
Phuket’s priciest property goes on sale