K Wah targets HK buyers for latest luxury Shanghai flats
K Wah International Holdings expects a third of buyers of its high-end apartments in Shanghai will be from Hong Kong as it believes Beijing's measures to cool the property market won't dent the enthusiasm of investors from elsewhere.
Hong Kong-listed K Wah will launch two luxury projects in Shanghai this year, hoping their limited supply in the city's prime locations will override investor concerns about Beijing's cooling measures.
'Curbs on the mainland property market will be long-lasting,' said Vincent Gu, an associate director in charge of K Wah's sales and property management on the mainland. 'But we are fully prepared to launch our projects, which, we believe, will appeal to homebuyers.'
The company is expected to launch The Palace, a premier project on downtown Jianguo Xi Road, in June, as well as the Grand Summit on Urumqi Bei Road, offering 100,000 square metres of luxury flats.
Gu said the firm would mainly target Hongkongers, for whom Shanghai property would be better value compared with Hong Kong prices. Shanghai home prices are expected to drop by as much as 10 per cent this year as a result of Beijing's cooling measures, while Hong Kong's market is likely to remain strong.
K Wah has yet to decide the prices for the upcoming projects but they are widely expected to go for 100,000 yuan (HK$119,094) per square metre.
Based on the price of HK$63,800 per sq ft for a unit of Henderson Land Development's residential development 39 Conduit Road in Hong Kong, Shanghai luxury home prices are only a fifth of those in Hong Kong.
'The fundamentals of the mainland economy and its property market remain healthy since the investment frenzy by foreign investors, including retailers, is set to continue,' said Siu Wing Chu, a senior director with Savills, the sales agent for K Wah's Shanghai developments.
Foreigners and Hong Kong residents are now allowed to own flats in Shanghai as long as they have worked in the city for at least a year.