China Overseas Land raises Kai Tak apartment prices by 22 per cent
China Overseas Land launches One Kai Tak’s second phase with an average premium of 22 per cent
China Overseas Land & Investment (Coli) has raised the sale price of its latest apartments by 22 per cent on average, setting an aggressive and discordant tone during an election year with the Hong Kong government’s pledge to make housing more affordable.
The first 125 units of One Kai Tak Phase Two, built on the city’s former airport site, will be offered between HK$17,414 per square foot and up to HK$26,013 per sq ft.
After taking into account a 14.5 per cent rebate, the price will come down to HK$14,889 and HK$22,240 per sq ft.
The developer said the average discounted price was HK$17,500 per sq ft, about 22 per cent above the previous HK$14,400 per sq ft in August.
“The price has factored in the recent land sale result in the area and the latest market conditions,” said Tony Yau, a director and general manager at China Overseas Property, a subsidiary of China Overseas Holdings, the parent of China Overseas Land.
That means the smallest unit measuring 375 sq ft at the apartment complex will be priced at about HK$6.42 million, or HK$17,000 per sq ft after discounts. The largest units at the complex measure 799 sq ft.
China Overseas’ aggressive pricing follows record bids placed last year by Chinese developers for land parcels at Kai Tak. HNA Group, a Chinese conglomerate that owns hotels, golf courses and Hainan Airlines, paid a record HK$13,600 per sq ft for land at the former airfield.
Land prices in the area surged as much as 155 per cent since 2014.
However, Coli bought the two adjoining site, with a total gross floor area of 880,280 sq ft, for a combined HK$4.54 billion, or HK$5,157 square feet in June, 2013. In terms of per sq ft, it was the lowest among the eight residential sites being sold by government tender within three years.
Coli’s One Kai Tak development is also the only project under the “Hong Kong Property for Hong Kong People” scheme.
“The launch of One Kai Tak and Grand Yoho will test the faith of the residential market as lots of changes in Kai Tak area in the past 12 months,” said Louis Chan Wing-kit, managing director of Centaline Property Agency’s residential department.
There are about 10,000 units in the sales pipeline in the area, he said.
“Over the next 10 years, Kai Tak area will be transformed into another Kowloon Station, which is a luxury residential area,” Cha said.
The market should not compare the One Kai Tak development with old districts such as San Po Kong or Kwun Tong area, he said.
Hong Kong authorities earmarked the residential development -- with a gross floor area of 880,280 square feet -- to build around 1,169 apartments specifically for permanent residents. The development is intended to provide a price shelter against non-resident speculative buyers.
For buyers to qualify, at least one person per household must hold a permanent identity card, while all units are barred from being resold to non-permanent residents for 30 years.
Tycoon Li Ka-shing, chairman of Cheung Kong Property Holdings, acknowledged that home prices have increased a little bit since the government raised the stamp duty, but indicated that the rise would not have been steep.
“I don’t feel comfortable if flats are too small. Cheung Kong may have one or two [projects with small flats],” he said. “I do not like it as people have basic needs. Depending on their budget, they can trade up for a bigger flat once their financial position improved.”
Last month, Chun Wo Property Development unveiled its TPlus development in Tuen Mun comprised of units starting from 128 sq ft, the smallest in Hong Kong.
In 2014, Cheung Kong became the first developer to build smaller flats, as its Mont Vert in Tai Po featured units as small as 165 sq ft.