Developer of Hong Kong micro flats Jiayuan gets closer to liquidation after buyers shunned parking-space-sized homes

Nanjing-based developer has appointed liquidators following a court order in May, according to an exchange filing

Company got buzz with launch of flats as small as 131 sq ft in 2019, but poor sales and record high interest rates weighed on its debts

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The T Plus residential development in Tuen Mun, pictured in November 2018. Photo: Nora Tam

Published: 1:41pm, 11 Jan 2024

Jiayuan International Group, the developer of Hong Kong flats so small they inspired the coining of the term “micro flats”, is inching closer to its corporate demise after record interest rates weighed on its debts following poor sales of its minuscule apartments.

The Nanjing-based developer lost a winding-up case over a HK$14.5 million (US$1.85 million) debt in Hong Kong last May. It said in a filing on Thursday that the Hong Kong High Court appointed Derek Lai Kar-yan, Ivan Chan Man-hoi and Cato Hau Kai-ling of the firm Deloitte Touche Tohmatsu as its liquidators, taking over from a provisional liquidator appointed at the time of the decision.

The company’s shares were first suspended in May 2022, but resumed trading a month later, only to be suspended again in April 2023.

Jiayuan, founded by Shum Tin-ching, made a splash in 2019 with the launch of an apartment tower called T Plus in Tuen Mun. Some of the flats measured 131 sq ft – smaller than a standard Hong Kong car-parking space – and were priced at HK$2.85 million. At the time, the micro apartments were among the cheapest newly built homes available in Hong Kong, which has been the world’s least affordable urban centre since 2011, according to US-based think tank Demographia.

Shum Tin-ching, chairman of Jiayuan International, pictured at a results briefing in March 2019. Photo: Dickson Lee

Despite the initial buzz, the project failed to sell, and Jiayuan ended up discounting its catalogue price by as much as 37.6 per cent to clear its inventory. Analysts at the time suggested this meant little or no profit from the project.