SHKP has spent $200m to build a show flat at Two IFC for its residential project In the latest example of extravagant promotions in Hong Kong, a developer has splashed out $200 million to build a show flat that takes up 50,000 sqft in Two IFC - one of the most expensive office towers in town. Selling is all about marketing these days, especially for homes that buyers are paying millions for without visiting the actual flat they purchase. Many believe it is still a mind-boggling price for a show flat that will be torn down once sales are completed. Sun Hung Kai Properties, the developer of The Arch near Kowloon Station that the show flat represents, probably thinks the money is well spent. The marketing cost translates into a tiny fraction of the anticipated total sales revenue for the 1,054 units. The cheapest flats are about 530 sqft and face away from the sea. They would cost about $6 million each, or $11,000 per sqft, according to the firm. The developer is known as the master of illusion. During the intensive marketing campaign for Park Island in Ma Wan last year, SHKP built a show flat on a beach in a bid to highlight the project's proximity to the sea. The show flat's price only includes the building cost - not the monthly rental for the space in the developer-owned office tower which is leasing at about $50 per sqft at the moment, according to Victor Lui Ting, the executive director of Sun Hung Kai Real Estate Agency, the marketing arm of Sun Hung Kai Properties. The developer said the show flat would include devices that simulate an open-air environment and the private swimming pool in some of its penthouse units - which have asking prices of more than $30,000 per sqft. The show flat is more expensive than the $110 million worth of flats in the first three phases of the Residence Bel-Air at Cyberport in Pokfulam developed by Pacific Century Premium Development, named PCCW Infrastructure then. Apart from the show flat, which is due to open this week, SHKP has already started a massive promotional campaign for the arch-shaped residential tower - including extra-length TV commercials, sponsorship of TV programmes about world-famous architecture and another show flat filled with expensive Baccarat crystal in the IFC shopping mall. All of this comes before the developer has secured pre-sale consent for The Arch. Property agents said flat seekers had already committed to buying about 130 units through negotiation with the developer, who would not comment on the matter. News that a buyer had agreed to pay $168 million, or $31,500 per sqft, for a 5,000 sqft penthouse unit was splashed across most property pages in the local media on Monday, citing it as the city's most expensive apartment transaction. However, the developer has declined to comment on the reported transaction. '[Selling some penthouse units with sky-high prices] is a very common way to stir up market sentiment before the official launch of a project. The developer can also lock up some demand in the market before obtaining the pre-sale consent,' a real estate agent said. Sun Hung Kai Properties is also building a nine-hole golf course and other recreation facilities on a 48,100 square metre site in the West Kowloon Cultural District, which the firm rented from the Lands Department on a two-year lease. The golf course will complement The Arch's clubhouse, which will be on the 59th floor and is the focus of the marketing campaign. Rival luxury projects due to be launched shortly are also gearing up to entice buyers. Cheung Kong (Holdings) recently said it was building the SAR's 'most luxurious' clubhouse for its upmarket residential project The Legend in Jardine's Lookout.
