Sun Hung Kai forecasts Yoho Midtown sales to set price record for Yuen Long

PUBLISHED : Wednesday, 10 February, 2010, 12:00am
UPDATED : Wednesday, 10 February, 2010, 12:00am

Sun Hung Kai Properties aims to achieve record sale prices for the second phase of its HK$10 billion Yoho Town development in Yuen Long, which will go on sale after the Lunar New Year.

'We will definitely set a new record price for Yuen Long,' said Amy Teo, a project director at Sun Hung Kai Real Estate Agency's sales department.

Support for this forecast came from four leading estate agents appointed to sell the development, known as Yoho Midtown.

'I expect some units on higher floors to sell for about HK$7,000 per square foot and the price of the development to average at HK$5,600 per square foot,' Cheong Shing Property Agency director Joe Lui said.

That outcome will compare with an average of HK$2,200 per square foot achieved by SHKP when it released the first phase of its massive township development in 2003. Secondary market sales of first-phase units are fetching about HK$4,200 per square foot.

With the help of its sales agents, SHKP has embarked on an aggressive marketing campaign to support its bid to push prices substantially higher. It is also counting on strong demand from mainland buyers.

More than 21,000 inquiries have been received so far, of which about 15 per cent were from the mainland, Teo said.

Yoho Midtown is expected to be completed in the third quarter of this year. It is about five minutes' walk to the West Rail's Yuen Long station.

Teo said the company would release 215 standard and 10 special flats for sale after the Lunar New Year.

In order to draw market attention, SHKP last week set up two show units at its 30,000 sq ft sales office in Sun Yuen Long Centre, next to Yoho Midtown. On Monday, it opened the project's residential recreation club, Club Midtown, for viewing.

SHKP said the four agencies appointed in Hong Kong to sell the development will set up more than 100 galleries displaying models and showing videos of the project.

Lui said the release would be Yuen Long's largest project to go on sale after Yoho Town phase one.

At the time, there was a price war in the market, which resulted in sales in the first phase averaging HK$2,200 per square foot, he said.

When completed, the HK$10 billion YoHo Town will have more than 4,100 residential units and a shopping centre of about one million sq ft.

Lui said property owners in the first phase had begun holding back from selling their units in anticipation that SHKP would pitch the second phase at higher prices.

'The number of transactions in Yuen Long has dropped by half this week compared with the previous week. Everyone is looking at prices of flats in phase two before deciding their next move,' he said.

Lui expects the new flats to achieve an average of HK$5,600 per square foot, with units on high floors to generate HK$7,000 per square foot.

He said about half of the prospective buyers who had made inquiries were from Hong Kong Island and Kowloon, with the rest from residents in Yuen Long.

'Some customers are interested in buying more than one unit for investment purposes,' he said.

Chris Wong, a director at Centaline Property Agency's New Territories West, said secondary market transaction prices for the first phase had jumped 10 per cent to HK$4,200 per square foot since October last year. 'The project will attract market attention when it is put on sale after the Lunar New Year,' he said.

Phase two comprises eight residential towers, with units ranging from 400 to 1,400 sq ft. They are one to four bedrooms and about half of them have two bedrooms.

There are also 50 special units, some of which have private swimming pools.

The clubhouse will have a 50-foot outdoor pool and a 25-foot indoor heated pool.

According to the Lands Department, SHKP paid a premium of HK$1.49 billion or HK$863 per square foot for converting the land use of the site in May 2004.

Surveyors believed its estimated investment cost would be HK$2,000 per square foot, compared with prevailing transactions of HK$4,000 to HK$4,200 per square foot in phase one of the development.

Paul Louie, the regional head of property research at Nomura International (Hong Kong), expects SHKP to generate more than HK$6 billion in revenue from the second-phase project, assuming an average price of HK$4,200 per square foot.

'But our estimation is very conservative,' he said.