Nan Fung buys back unsold flats
Developer Nan Fung reached an agreement to buy the Urban Renewal Authority's share in the remaining 87 units of their Queen's Cube project after failing to sell the flats.
The price at which Nan Fung is buying the flats is based on the price offered to the public last year.
The buyback comes about after only nine of the 96 flats at 239 Queen's Road East were sold since the project was launched nearly a year ago. The launch price of HK$17,000 per square foot on average raised eyebrows, especially because the project was co-developed by the government-founded URA.
'In accordance with the contractual mechanism, the URA and Nan Fung Group, its joint-venture partner of the Queen's Cube project, have proceeded with the assignment of all of the 87 unsold units at Queen's Cube to Nan Fung Group, with the sale proceeds based on the valuation assessment determined by an independent valuer,' a URA spokesman said yesterday.
But the valuation, amount involved and share percentage were commercial information that could not be released for confidentiality reasons, he said.
He said there was provision for such buybacks for unsold flats in completed urban renewal redevelopment projects in joint ventures with private developers.
Nan Fung confirmed the buyback, but did not reveal details of the deal. Managing director Donald Choi Wun-hing told media the 87 flats would become serviced apartments.
Flats at Queen's Cube have a gross floor area of 401 sq ft to 582 sq ft. They were put on the market last October at prices ranging from HK$14,888 to HK$18,370 per sq ft, making the price tag for a 401 sq ft flat a whopping HK$5.97 million.
Vincent Cheung Kiu-cho, property consultancy Cushman & Wakefield's national director for valuation and advisory services, said it was rare for developers to buy back the URA's share because of poor sales. But he did not think this would affect future redevelopment projects between the authority and private developers.
'If the developer has no urgency to cash in the units, it's appropriate for them to lease the remaining flats so that the tenants - who may eventually buy the units - will be able to get a feel of what it is like to live in the properties,' he said.
Barry Tun Kwok-leung, a senior sales manager of Midland Realty's Wan Chai branch, said the majority of the nine units sold at the Queen's Cube had been leased out and that there was a huge demand for serviced apartments in Wan Chai.
The rate in Hong Kong dollars being charged per square foot per month for serviced apartments in Wan Chai such as Fraser and Garden East