Cheung Kong

Cheung Kong and government clash over sale of Apex Horizon hotel units

PUBLISHED : Saturday, 23 February, 2013, 12:00am
UPDATED : Saturday, 23 February, 2013, 5:14am


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A Lands Department letter leaked by the Civic Party has sparked a heated exchange between the administration and property giant Cheung Kong over its controversial sale of hotel suites.

The letter suggested that the government knew of Cheung Kong's plan to sell hotel units at Apex Horizon in Kwai Chung as early as May 2011. In the letter, the department approved a sub-deed of the hotel, and reminded the developer to alert buyers that the units could be used only for hotel purposes.

A spokeswoman for the Lands Department emphasised yesterday that the approval was in accordance with the land lease.

"The key issue is whether the units will still be used as hotel suites after the sale," the spokeswoman added.

This is the first time in Hong Kong that a developer has sold hotel suites built on commercial land to individual buyers who may treat them as residential units.

The spokeswoman also revealed the Lands Department made inquiries last month when a suite in Apex Horizon was sold, "yet Cheung Kong ignored the department's queries a few days ago and launched the sale on a large scale … which made it necessary for us to clarify publicly".

Cheung Kong countered, saying it never ignored the Lands Department, and "deeply regrets such [an] accusation".

The key issue is whether the units will still be used as hotel suites after the sale

A spokesman for the property giant stressed it responded to the government's query.

When asked if the steps announced yesterday to cool the property market were partly a response to the suite sale controversy, Financial Secretary John Tsang Chun-wah said: "It has absolutely nothing to do with Cheung Kong."

A government source said because the new measures involved various initiatives on stamp duty and rates, "they took a long time to prepare, and it is impossible for them to be ready in a matter of days". There were signs last night that the measures have hit buyer-speculators who were considering reselling the hotel units.

According to Ricacorp Properties manager Andy Jim, there are about 50 flats at the 360-flat Apex Horizon hotel for sale in the secondary market after buyers acquired units on Monday and Tuesday.

"About 20 per cent of them worried it would be difficult to find new buyers for their flats and decided to cut their asking prices by 3 to 4 per cent. But their asking prices are still about 10 per cent higher than their acquisition costs," Jim said.

He estimated about 90 per cent of the buyers are investors and a significant number of these are speculators.

With new tax rates applying to all types of property, buyers of units at Apex Horizon will be charged a higher stamp duty if they plan to resell from today.

Ip Chiu-fai, who bought a unit at the Apex Horizon on Tuesday, said the new measures would not affect him.

"It's not a big problem for me because I am planning to keep the property for rental return," Ip said.

Cheung Kong has said the sale raised HK$1.4 billion, almost seven times the land premium it paid to the government when it applied to change the site from industrial to non-industrial use.