Le Prestige sales tactic pays off with 300 deals

PUBLISHED : Saturday, 18 July, 2009, 12:00am
UPDATED : Saturday, 18 July, 2009, 12:00am

Low prices proved to be an effective tactic in attracting investors and homebuyers last night, when a new residential project in Tseung Kwan O sold more than 300 units at about HK$5,000 per square foot in two hours, property agents said.

Le Prestige, the 1,688-unit residential project jointly developed by Cheung Kong (Holdings), Nan Fung Development and MTR Corp, yesterday drew more than 1,000 prospective buyers to its sales office for the first batch of 32 flats offered. Market watchers believe all the 1,688 units would be sold out today.

'The 'ask high, sell low' strategy ... pretending they are offering the units at a big discount, proved to be successful in luring buyers,' said one property analyst.

The developers said last week they intended to sell the units at an average price of HK$5,500 per square foot but eventually launched the project at HK$4,692 per square foot for the first 32 units, a 14.69 per cent discount.

The average selling price of HK$5,000 per square foot for the units sold yesterday is also at a 9.65 per cent discount to the HK$5,534 per square foot recorded at five-year-old Residence Oasis, according to Land Registry data, counting the transactions of units ranging from 850 to 1,500 sqft over the past month.

Compared with the HK$4,450 per square foot fetched on the secondary market by units in the Capitol, Park Centre and Metro Town, the selling price in Le Prestige was at a 12.36 per cent premium, much lower than the market norm of about 30 per cent premium to the secondary market.

In addition to the relatively low-pricing strategy, the availability of a mortgage plan requiring only a 5 per cent down payment attracted investors to bet on the project, the analyst said.

'With 1,688 units in Le Prestige, thousands of units listing in the secondary market and more than 20,000 new flats in the district in the pipeline, the developers can't be too aggressive, especially when market transactions are slowing,' another analyst said.

Le Prestige is the second phase of the Lohas Park massive residential project, which is scheduled for completion by the middle of next year. The Capitol, which was sold out last year and is now ready for occupancy, is phase one of the project.

Lohas Park is at Wan Po Road north of the Tseung Kwan O industrial district and the Southeast New Territories Landfill.

The project will eventually comprise 50 towers of 46 to 59 floors high, offering a total of 21,500 flats, twice the number at City One Shatin. It will have a gross floor residential area of 17.36 million sq ft, accommodating 58,000 residents when completed by 2019.