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Sandy Li

Sun Hung Kai Properties (SHKP) is the latest developer rushing to bring residential projects to market, announcing that it will release the next phases of units at its joint-venture development in Pokfulam within a week.

SHKP and Shun Tak Holdings will offer 24 units at The Belcher's phase two today at an average price of HK$5,400 per square foot for cash. Units will start from HK$4,228 per square foot.

Last Thursday, the developers offered 30 completed units at phase one at an average price of HK$6,006 per square foot.

Agents said prices for the latest batch of phase-two units represented an effective price cut of at least 7 per cent after taking into account special payment terms.

SHKP and Shun Tak denied a price cut, however, saying the average price of the latest batch at phase two was HK$5,400 per square foot for cash against last October's launch price of HK$5,200 per square foot.

The developers said the special financing packages offered to buyers at phase one would be extended to phase two buyers.

The financial packages include a 25 per cent second mortgage at 1.75 per cent above prime rate, with no interest or principal to be repaid in the first four years.

Analysts believe the developers decided to speed up the sale of The Belcher's to fend off competition from rival Wing Tai Asia-led consortium's luxury project in Kowloon Station.

Wing Tai last week sold more than 60 units at The Waterfront after it slashed prices by 20 per cent to HK$4,600 per square foot.

Eric Chow Kwok-yin, general manager of Sun Hung Kai Real Estate Agency, SHKP's marketing arm, said the developers did not see competition from The Waterfront as the two developments were at different locations.

He said no price reduction was seen at The Belcher's, though some developers had lowered their prices.

He pointed out that SHKP and Shun Tak remained confident in the prospects of the luxury residential sector. He expected luxury home prices to increase by 5 to 10 per cent in the second half of the year.

The 24 units on offer, measuring between 1,398 sq ft and 1,409 sq ft, were priced between HK$6.1 million and HK$9 million.

Although the developers said the special financial packages for phase-one buyers were well received, Mr Chow refused to disclose the number of units sold.

Dao Heng Securities deputy research head Eric Yuen Chi-fung said the developers' margins would be squeezed, given the sweeteners equivalent to an effective price cut.

He said that if the policy of offering sweeteners continued for long, the market might need to revise downward developers' earnings forecasts.

But he believed developers would reduce their preferential terms once they had generated a satisfactory sales response.

Meanwhile, Cheung Kong (Holdings) said it would release the sale details of its Laguna Verde phase five in Hunghom tomorrow.



Developer offers extended financing for second phase of joint-venture Pokfulam project