Le Prestige faces competition

PUBLISHED : Wednesday, 08 July, 2009, 12:00am
UPDATED : Wednesday, 08 July, 2009, 12:00am

Banking on the rebound under way in Hong Kong's property market, the developers of the Tseung Kwan O residential project Le Prestige are expected to kick off sales in the next few weeks.

The project is being jointly developed by MTR Corp, Cheung Kong (Holdings) and Nan Fung Development and consists of four blocks offering 1,688 units that range in size from 900 to 1,300 square feet.

Asking prices for three-bedroom units were expected to average HK$5,500 per square foot, while the cheapest of the four-bedroom flats would cost about HK$7.3 million or an average of HK$6,100 per square foot, said Cheung Kong Real Estate director Francis Wong See-chung.

At HK$5,500 per square foot, the average asking price at Le Prestige will be on par with or at a premium of about 10 per cent to the selling prices of HK$5,094 to HK$5,569 per square foot recorded in projects in the same district such as Metro Town, Residence Oasis and Park Central for units sized at 1,000 sq ft or above, according to Land Registry data.

It is about 30 per cent higher than prices fetched on the secondary market by units in the Capitol, which are smaller - ranging from 683 to 1,115 sq ft.

Le Prestige is the second phase of the massive residential project Lohas Park, which is scheduled for completion by the middle of next year. The Capitol represents phase one of the project.

In February last year, when the market was still enjoying a bull run, the developers sold all 2,096 flats in the Capitol in less than 36 hours at an average price of about HK$5,200 per square foot, reaping about HK$10 billion from the sales.

Sixteen months on, in a market that is recovering from the impact of the global financial crisis, units in the Capitol are selling on the secondary market at prices ranging between HK$3,452 and HK$5,938 per square foot, data from the Land Registry shows.

Data also shows that 85 of the 89 secondary sales at the Capitol recorded in the last three months left sellers with losses ranging from six to 33 per cent.

'I doubt the developers will be able to sell all the units in one go, because they are not priced at a discount to the secondary market and transaction volumes have been slowing in the last few weeks,' said an analyst.

Also, developers faced the challenge of marketing the flats at a time when Tseung Kwan O was swamped with projects that were built in the last five to eight years and more than 20,000 new flats were in the pipeline.

By comparison, a lower supply of new units in Wu Kai Sha helped Sino Land achieve a quick sale of flats in Lake Silver in May, but this did not indicate a similar outcome for Le Prestige, the analyst added.

Also, speculators at the Capitol might cut their asking prices to offload their flats before completing the deals, and this could force asking prices at Le Prestige lower, the analyst said.

The Lohas Park project is located in Wan Po Road, north of the Tseung Kwan O industrial district and Southeast New Territories Landfill.

It will eventually comprise 50 towers of 46 to 59 floors each, offering a total of 21,500 flats - twice the number in City One Shatin - with a gross floor residential area of 17.36 million sq ft. When the project is completed by 2019, it will accommodate 58,000 residents.

Supply plentiful

Average price for 3-bedroom flats is expected to be, in HK$ per square foot: $5,500