A PRIVATE property investment company has failed to complete the $1 billion purchase of 208 flats in Laguna City, developed by Cheung Kong (Holdings) in Lam Tin. The deadline for Mass Resources Development to pay the 75 per cent it still owes on the deal is said to have passed. Cheung Kong is now threatening to forfeit Mass Resources' deposit of about $250 million unless it can quickly complete the deal. It is believed that Cheung Kong was still urging the investor to complete the deal. Mass Resources agreed to pay an average $6,100 per square foot for the flats when the market was near its peak in May last year. Property prices have since dived 30 per cent, with Laguna City flats now fetching just $4,200 per square foot in the secondary market, about 30 per cent less than what Mass Resources paid. The drastic drop in prices makes completing the deal hardly worthwhile. The flats are in blocks 10 and 20 in the project's fourth phase. It is believed Cheung Kong has no definite plans to put them back on sale yet, but will do so in future if Mass Resources fails to complete the deal. Analysts said Cheung Kong might make a provision for a possible forfeiture this financial year, but said the size of the provision was small compared to the developer's full-year earnings of more than $10 billion. A source at Cheung Kong yesterday confirmed the purchases had not been completed before the official deadline. He said it was unlikely the deal would be completed due to the substantial drop in the value of the flats in the secondary market. The possible forfeiture confused some property analysts who believed that the profit from the sale of the 208 flats had already been booked in the past financial year. 'If the investor has not completed the purchase, the sales profit of those 208 units should not be booked into last year,' one analyst said. Assuming the profits were booked last year, analysts said Cheung Kong might make a provision loss of less than $100 million this year if Mass Resources pulled out of the purchase deal for the Laguna City flats.