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Nan Fung extends top-up mortgage option to cover its office developments

Nan Fung

NAN Fung Development's controversial policy to provide top-up mortgages to 100 per cent of the purchase price of its residential flats has been extended to its office developments.

Just three weeks after the property player made an unprecedented move to offer the extra financing arrangement to buyers of its residential flats in the territory, the company announced a similar option for its commercial property - Nan Fung Commercial Centre in Kowloon Bay.

A Nan Fung official said it was the first time the company had arranged the extra financing for potential office customers in a move to boost sales of its properties.

'The 100 per cent mortgage loan will be arranged by Nan Fung's finance arm. But buyers who choose this option are required to pay a higher price than other options they choose,' the official said.

According to another official the mortgage rates charged by Nan Fung would be 'about the same' as those charged by banks.

Nan Fung also provides similar 'preferential payment options', which are available to buyers of residential flats, to potential buyers of space in Nan Fung Commercial Centre.

Buyers can pay 30 per cent of the purchase price in 30 instalments without interest payment after they move into office units. The remaining 70 per cent should be completed before May 31, 1997.

For buyers who choose to pay five per cent of the purchase price as a down-payment, the remaining 25 per cent can be paid in 25 interest-free instalments after they move in. The remainder should be completed in 21/2 years.

Offered for sale are 110 office units of Nan Fung Commercial Centre, each ranging from 929 square feet to 1,243 sq ft. The average price is about $4,500 per sq ft.

The 20-storey building has 15 office floors, each measuring from 31,704 sq ft to 32,144 sq ft. It also has restaurants and three car park levels.

The payment policy also applies to the sale of seven office units of another Nan Fung property in Tsuen Wan. The units range from 967 sq ft to 1,684 sq ft are priced at about $1,230 per sq ft.

Some property agents described the policies as 'a risky endeavour' saying that the option would not lead to an offer of similar commitments by other developers.

One property agent said: 'The move suggests Nan Fung does not want to hold the stock and plans to realise cash as soon as possible.' Samson Wong San, managing director of Samson Wong and Associates, predicted Nan Fung's move was to boost the current 'boring' market sentiment.

Mr Wong said it was foreseen that more office supply on the fringes of town would come on-stream in the medium term. So, Nan Fung was unloading its stock before the anticipated supply was put on the market.

He said that while the commercial centre was 'one of the best in Kowloon Bay', the selling price was relatively high compared with other office towers in the area.

'There are other methods to boost sales instead of cutting prices.'