Developer pushes on with sales launch

Undeterred by a corruption probe into its two joint chairmen, Sun Hung Kai Properties still plans to push ahead with the release of an aggressively priced major residential housing project in Tuen Mun to gauge market demand.

The developer has indicated that it is aiming for HK$10,000 per square foot at its new 1,075-flat development, Century Gateway phase one, at Tuen Mun station. This is double the average price fetched recently in secondary market sales at major housing estates in the area.

The developer, which is still awaiting pre-sale consent for the project from the government, hopes to release the project after Easter.

Analysts said the sale would also serve to indicate any impact on the company from the arrests of the two tycoon brothers, Thomas Kwok Ping-kwong, and Raymond Kwok Ping-luen, and the former chief secretary Rafael Hui Si-yan by the Independent Commission Against Corruption (ICAC) on suspicion of bribery and misconduct in public office. All three were released on bail late last Thursday, and have not been charged with any offence.

Alfred Lau, an analyst at Bocom International, said he believed the arrest of the Kwok brothers last week would not put off potential buyers of units at Century Gateway, because buyers were focused on value for money.

'Home seekers believe it's highly unlikely that the probe means that Sun Hung Kai Properties' co-chairmen will disappear and leave the project half-built,' he said.

Sun Hung Kai Properties announced earlier that it had secured 90 per cent of its HK$32 billion sales target for the current financial year to June 2012.

Lau said developers had been adopting a strategy of selling projects at aggressive prices to draw attention.

'It's only a gimmick,' he said, predicting that the project would be launched at an average price of about HK$6,500 per square foot. 'It will still set a record in Tuen Mun where there's been no new supply for nearly 10 years,' Lau said.

In 2006, the former KCR Corporation, which later merged with the MTR Corporation, awarded the site to Sun Hung Kai Properties after SHKP agreed to pay a land premium of HK$3.8 billion.

The residential project will be developed in two phases with a total of 2,000 flats, ranging from 500 to 3,000 sq ft. It is due for completion in the second half of 2013. The project will also include a 269,000 sq ft retail complex, V City.

Victor Lui, executive director of the Sun Hung Kai Real Estate Agency said the developer had received more than 300 inquiries about the project, and most people were interested in buying the larger properties. The agency aimed to offer these larger flats for at least HK$15 million each, or HK$13,000 per sq ft, he said.

The two Kwok brothers have denied any wrongdoing, and assured investors in a high-profile news conference on Tuesday that it was 'business as usual' at the company. However, the reassurances failed to prop up the share price of Sun Hung Kai Properties, which closed down 0.31 per cent yesterday at HK$95.95.