Paladin jumps on booming market

PUBLISHED : Wednesday, 02 February, 2005, 12:00am
UPDATED : Wednesday, 02 February, 2005, 12:00am

Developer Paladin plans to raise the price of its Peak property project by 5 to 15 per cent to ride the booming luxury residential market.

The company said it had cashed in about $540 million from the sale of 11 of the 34 units at its 8 Peak Road project. The average price for those units was $17,000 to $22,000 per square foot.

The developer plans to sell two to four more units at 5 to 15 per cent above that price range in the near future in an attempt to reap an additional $200 million to $250 million.

It plans to lease the rest of the flats at about $50 to $60 per square foot as its long-term investment.

'We expect luxury residential projects will continue to outperform the rest of the property market due to relatively short supply in the segment,' said Claudius Grossmann, an adviser to Paladin.

Mr Grossmann said he expected prices to climb 15 to 20 per cent this year and rentals to increase 10 to 15 per cent.

Lilian Oung, Paladin's majority shareholder and director of Paladin's wholly owned subsidiary Holyrood, said the company had no plans to sell all of its units on the Peak, even if prices continued to climb in the near future.

The development comprises two towers, offering 28 simplex flats of 2,700 to 2,800 sqft and six duplex units of 4,200 to 5,300 sqft.

According to a study by property agency Midland Realty, the Peak has fewer than 70 units in new supply. These included 30 flats on Severn Road, 13 units on Barker Road and nine homes on Macdonnell Road.

'The momentum is still going strong at the Peak,' said Jeffrey Ng Chong-yip, a director with Midland. 'Many buyers have turned to the secondary market in light of the short supply in the primary market.'

Average luxury prices on Hong Kong Island rose about 50 per cent last year as buyers have been out in force to snap up properties in the segment.

Shares of Paladin soared 16 per cent yesterday to close at 58 cents.