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By selling Viva flats below market rates, CK Property is continuing the fast asset turnover strategy of local developers. Photo: Dickson Lee

Hong Kong's CK Property undercuts competing developers to offload Viva units

Cheung Kong Property Holdings is joining the new wave of housing supply coming on the market by setting prices substantially lower than the going rate.

Yesterday it released the prices for the first batch of 38 units at Viva, at 77-87 Ma Tau Wai Road, which range from HK$15,023 to HK$22,495 per sq ft, about 7 to 23 per cent cheaper than Henderson Land Development's nearby 120-unit Axis, with flats ranging from 212 to 247 sq ft each. Henderson last month sold 25 units of Axis - on Ma Tau Wai Road - at HK$19,577 to HK$24,283 per sq ft.

"CK Property's low price strategy indicates its determination to sell all units in one go," said Sammy Po Siu-ming, chief executive of Midland Realty's residential department.

Sino Land last week launched its Corinthia By The Sea project in Tseung Kwan O at prices about 10 per cent lower than nearby projects.

CK Property's low price strategy indicates its determination to sell all units in one go
Sammy Po Siu-ming, Midland Realty

Alvin Cheung Chi-wai, associate director at Prudential Brokerage, said he expects more projects to come on the market at competitive prices amid rising supply. "The trend will continue as most developers are adopting fast-asset turnover strategies," he said.

Analysts like Midland Realty's Buggle Lau Ka-fai also believe the once-scorching pace of growth of prices of small flats could slow after the rapid rises.

Last month, the Rating and Valuation department said prices of small flats have risen about 24 per cent in the past 13 months, compared with just a 13 per cent increase for large flats, leaving little scope for upside for small flats.

The first batch of Viva units, ranging from 315 sq ft to 487 sq ft, have been priced between HK$5.01 million and HK$8.93 million. Factoring in a maximum discount of 13 per cent, prices will come to HK$13,070 to HK$19,570 per sq ft, or HK$4.35 million to HK$7.76 million.

Louis Chan Wing-kit, a managing director at Centaline Property Agency, said the pricing would attract investors. "As the units are being offered at prices lower than those of similar second-hand units, they will get a strong response," he said.

Justin Chiu Kwok-hung, an executive director of CK Property, said the firm would pull in HK$260 million if all 38 units are sold. Due to be completed in April 2017, Viva comprises 75 units. Axis is expected to be completed a month earlier.

Separately, Sun Hung Kai Properties will today launch the first batch of 38 units at its Ultima luxury development in Ho Man Tin, with an average price of HK$36,616 per square foot. Factoring in a maximum discount of 12.5 per cent, the average price would amount to HK$32,000 per square foot. Wing Tai Properties said it would also sell 15 units at its Homantin Hillside in Ho Man Tin today.

This article appeared in the South China Morning Post print edition as: CK Property undercuts going rate to offload units
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