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Cheung Kong Pays 10% Lower For Site In Hong Kong
Source: Bloomberg News |
June 10, 2011, Friday
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Print Edition
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HONG Kong sold a site in one of the city's most exclusive areas below surveyors' estimates, suggesting higher mortgage rates may be denting demand.
Cheung Kong (Holdings) Ltd, the developer controlled by billionaire Li Ka-shing, paid HK$11.65 billion (US$1.5 billion), 10 percent lower than the HK$13 billion median estimate of five surveyors and analysts polled by Bloomberg News, for the site on Borrett Road, a 10-minute drive from Central. The price was equivalent to HK$26,763 per square foot, according to Centaline Property Agency Ltd.
The Borrett Road site has a buildable area of 435,000 square feet. The estimated selling price for the plot is HK$30,763 per square foot, Centaline said.
"You can see that lots of people are holding back," said David Ji, head of China research at DTZ Holdings Plc in Hong Kong. "Banks are raising interest rates, and there are some effects from the government policies. It will only be clearer in a few months whether this is a wait-and-see situation or something long-term."
Property transactions fell for a fifth straight month in May while overall home price growth is slowing after lenders accelerated mortgage rate increases in April as liquidity dried up. Prices may decline 10 to 20 percent in 2012 and a further 10 percent in 2013 on rising mortgage rates, Andrew Lawrence, a Hong Kong-based analyst at Barclays Capital, said this week.
Cheung Kong also was the buyer of a second site sold by the government at yesterday's auction. The 65,400-square-foot plot in northern Yuen Long district fetched HK$300 million, beating the top estimate in a range of HK$130 million to HK$220 million.
Cheung Kong (Holdings) Ltd, the developer controlled by billionaire Li Ka-shing, paid HK$11.65 billion (US$1.5 billion), 10 percent lower than the HK$13 billion median estimate of five surveyors and analysts polled by Bloomberg News, for the site on Borrett Road, a 10-minute drive from Central. The price was equivalent to HK$26,763 per square foot, according to Centaline Property Agency Ltd.
The Borrett Road site has a buildable area of 435,000 square feet. The estimated selling price for the plot is HK$30,763 per square foot, Centaline said.
"You can see that lots of people are holding back," said David Ji, head of China research at DTZ Holdings Plc in Hong Kong. "Banks are raising interest rates, and there are some effects from the government policies. It will only be clearer in a few months whether this is a wait-and-see situation or something long-term."
Property transactions fell for a fifth straight month in May while overall home price growth is slowing after lenders accelerated mortgage rate increases in April as liquidity dried up. Prices may decline 10 to 20 percent in 2012 and a further 10 percent in 2013 on rising mortgage rates, Andrew Lawrence, a Hong Kong-based analyst at Barclays Capital, said this week.
Cheung Kong also was the buyer of a second site sold by the government at yesterday's auction. The 65,400-square-foot plot in northern Yuen Long district fetched HK$300 million, beating the top estimate in a range of HK$130 million to HK$220 million.
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