Country Garden rolls out first batch of Hong Kong flats, pricing some units at below cost
- The developer is preparing to release 110 flats at Altissimo in Ma On Shan, with prices starting at HK$13,887 per square foot for some units, below investment cost, analysts say
Country Garden Holdings, China’s largest developer by sales, is bracing for a potential loss on its majority-owned residential project in Ma On Shan, as an initial batch of flats are being released at a starting price below development cost, according to analysts.
The developer said on Friday the first batch of 110 flats at the 547-unit Altissimo would be offered at a starting price of HK$13,887 (US$1,773) per square foot, after factoring in a discount of up to 14 per cent.
In September last year Country Garden paid Wang On Properties HK$2.44 billion, or HK$10,500 per sq ft, for a 60 per cent stake in the 387,500 sq ft residential lot.
Taking into account construction costs of roughly HK$4,000 per sq ft and interest expenses, surveyors said the overall investment cost would range between HK$15,000 to HK$16,000 per sq ft.
Country Garden said on Saturday it expects the overall investment return on the project will not deviate significantly from its target.
“The Hong Kong property market remains healthy and demand for housing is strong,” the company said in a written statement.
