Even assuming that the air in Victoria Harbour was pollution-free, the transaction price was still too high, a managing director of a European property fund said.

'For that price, I can buy one or two houses on Island South,' he said, adding that houses had more upside in capital appreciation because supply was relatively scarce.

Earlier this month, Manhattan Realty sold a 5,825 sqft house at 42 Island Road for $145 million, or about $25,000 per sqft while New World Development recently relaunched two houses at 33 Island Road at similar unit prices.

Wharf, encouraged by the transaction price of The Arch penthouse, recently launched its 48-unit project at 1 Plantation Road and set a target price of about $30,000 per sqft.

The fund manager, who manages an extensive real estate portfolio in Asia-Pacific, said: 'If you are looking for rental return it is easier to invest in the office market [if you have $168 million]. Some grade-B offices in non-core areas, such as Wan Chai, are generating about 6 per cent yields.

'Investors could also invest in strata-title grade-A offices for a quick transaction but lower rental yield.'

Property consultants said this compared with an estimated yield of less than 2 per cent per year for the record-breaking penthouse sold in The Arch.

Property consultants said the estimation was based on a maximum rent of about $50 per sqft.

One consultant said: 'Most properties on The Peak are renting for less than $60 per sqft.'

Some apartment projects in traditional luxury districts are also generating better rents than possible in The Arch.

Jimmy Fong, a director of residential development and investment at property consultant Savills, said flats in Grosvenor Place, at 117 Repulse Bay Road, had panoramic views of Repulse Bay and were achieving rental returns of 3 per cent to 3.5 per cent.

Three units there, each of about 2,800 sqft, were leased for about $120,000 to $140,000 per month each recently while a fully furnished show flat in the project was sold for $56 million this month, Mr Fong said.

A 4,247 sqft penthouse in the single-tower project was still vacant. The owner recently turned down an offer of about $25,000 per sqft to buy the property.

Property Consultants said it was also safer to diversify and use the $168 million, enough to snap up more than 20 units in Taikoo Shing, to buy smaller apartments and get more value for money.

Veteran property investor Chan Ching-pak said the price of The Arch penthouse was completely unrealistic.

'The project is adjacent to Jordan and is definitely no match for prestigious locations such as Island South and The Peak.

'I can see transactions for nearby project The HarbourSide slowing significantly because the asking price [for standard units] is $14,000 to $15,000 per sqft,' Mr Chan said.

It seems that the buyer fits well the image projected by the developer. He is a cash-rich businessman who is obsessed with a view from Kowloon, who needs frequent access to Chek Lap Kok airport and frequently travels to the mainland by rail.