Forced sale paves way for construction of HK$2b Happy Valley luxury project Kerry Properties will pay HK$6,178 per square foot to buy out the remaining owners of the 13-storey South Court residential building in Happy Valley, clearing the way for the company to build a HK$2 billion luxury residential project on the site with an unnamed partner. Combining South Court with a neighbouring site it already owns, the company plans to develop residential homes with a total floor area of 260,000 square feet, Kerry executive director Stephen Ho Shut-kan said. Mr Ho estimated the investment cost, including the land and construction, would be HK$2 billion. The sale was made in an auction compelled by the Lands Tribunal after Kerry and a partner acquired 93 per cent ownership of the building in June. Kerry was the only bidder, offering about HK$46 million for the building share it did not already own. The developer had bought the initial stake, as well as control of three neighbouring properties on Village Terrace, from an investor who had secured units in the buildings one by one over the past few years. In the June deal, the investor sold about 70 per cent of the redevelopment project to Kerry for about HK$1 billion while keeping the remaining share. The 41-year-old building on Shan Kwong Road is the seventh property acquired by enforced sale since 1999, when the government began allowing an owner of more than 90 per cent of a building to apply to the Lands Tribunal to force the sale of the rest. Majority owners of at least five other old buildings are waiting for a ruling on their respective applications for compelled sale. Charles Chan Chiu-kwok, a managing director at Savills Valuation and Professional Services, said: 'The accommodation value of South Court is reasonable, compared with the prices in the secondary market. The flat prices of the project will reach more than HK$10,000 per square foot after completion.' The prices of flats in old buildings in Happy Valley ranged between HK$4,000 and HK$6,000 per square foot in the secondary market, according to Aikeu Chan, a district manager at Centaline Property. To further encourage the redevelopment of old housing, the government plans to lower the minimum ownership limit for enforced auction to 80 per cent for buildings that satisfy any one of three criteria: the developer has acquired all but one of the units, the building is at least 40 years old, or the owners holding 10 per cent or more of the building are untraceable. Kerry is controlled by the Kuok Group, which is also the controlling shareholder of the SCMP Group, publisher of the South China Morning Post. Kerry shares yesterday rose 1.32 per cent to close at HK$26.95.