Cheung Kong vows to stamp out illicit trading, tells firms to comply with the rules as it kicks off marketing Legend Cheung Kong (Holdings) is keen to demonstrate compliance with government calls for better regulation of internal sales in new development projects as it begins marketing its new luxury residential property at Jardine's Lookout, the Legend. In an open letter to property agents released yesterday, the developer vowed to stamp out illicit trading in flats and warned that agents had no authority to make agreements with flat buyers on the 376-unit development before presale consent was received from the Lands Department. 'In the event that we discover your firm purportedly doing so, this will result in your firm not being able to participate in the sales work of the Legend,' the developer said in the letter, which agents described as 'unusual'. Major developers are widely believed to have encouraged such activities in the past. 'The developers can gather much more market information and secure buying power in the market by doing this,' said a director of a major real estate agency. 'They never actually appoint us to do it, but are usually helpful. They often provide flat layouts and sometimes an indicative deposit requirement.' Agents have admitted to taking registrations and deposits on high-profile projects such as New World Development's Merton and Sun Hung Kai Properties' Arch, months before their official launch. Cheung Kong sales director Francis Wong declined to say whether current guidelines on internal sales penned by the Real Estate Developer Association were sufficient to regulate the industry, but said he appreciated the 'flexibility' they offered developers. 'Some luxury projects, such as the Legend, are more suitable to be marketed through internal sales,' said Mr Wong, adding that most units in the Legend would not be available for public sale. Mr Wong said flat seekers would receive a price list at least a day before the launch of an internal sale, but the number of units to be listed had not been fixed. The absence of a comprehensive price list at major developments has added controversy to the debate over internal sales, as flat seekers find themselves negotiating with developers without sufficient price references. While stressing the Legend had not yet received its presale consent and that no sales activity was under way, Mr Wong indicated that the cheapest unit in the project, with a floor area about 1,500 square feet, would be at least $15 million. 'The lowest unit price should be more than $10,000 per square foot,' said Mr Wong, referring to 2,000 sq ft units without a sea view. A 3,800 sq ft unit on an upper floor would fetch at least $100 million, or more than $26,000 per square foot, he said.
