Hong Kong developer loses record US$331.5 million on resale of residential land at Kai Tak as coronavirus darkens market outlook

Goldin, a developer controlled by billionaire Pan Sutong, suffered a HK$2.57 billion loss on the residential plot at former airport site

Developer said it needed to raise cash amid the uncertainty caused by the Covid-19 pandemic

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Goldin Financial is selling Kai Tak 4B Site 4, pictured, for HK$7.04 billion, having paid HK$8.91 billion for it in November, 2018. Photo: Roy Issa

Published: 12:53pm, 11 May 2020Updated: 10:36pm, 11 May 2020

A Hong Kong developer has suffered the biggest loss on a land sale in the city’s history, offloading a residential plot at Kai Tak to raise cash to help it weather a market slump caused by the coronavirus pandemic.

Goldin Financial Holdings, controlled by billionaire Pan Sutong, has agreed to sell the plot at the site of the former international airport for an estimated loss of HK$2.57 billion (US$331.56 million). It cited the uncertain market outlook as the city’s economy suffers a massive blow from the Covid-19 outbreak.

The company’s pullback represents a damning verdict on the outlook for the market, with valuations pummeled by months of anti-government protests, before the outbreak of coronavirus this year darkened the gloom. The former airport strip has now been associated with several deals that burned developers seeking a slice of action the world’s most expensive real estate market.

A loss on this scale from reselling government land was unprecedented, said Alex Leung, senior director at CHFT Advisory And Appraisal.

“Very few land parcels change hands,” he said. “The market has reversed, and Kai Tak really has a higher risk as the supply there is relatively high. Land value there will drop more than land in urban areas such as Kwun Tong and Sham Shui Po.”