Hong Kong property

Shenzhen tycoon quells talk of financial problems, says he’ll pay for early possession of house on The Peak

  • The deal will come at a discount of HK$70 million, or 3 per cent, lowering the cost to HK$2.03 billion
PUBLISHED : Friday, 30 November, 2018, 9:51am
UPDATED : Saturday, 01 December, 2018, 12:39am

The Shenzhen property tycoon who agreed to pay HK$2.1 billion (US$268.5 million) for Hong Kong‘s most expensive mansion on The Peak says he will take possession of the property a year early, quelling talk that the deal was in trouble.

The deal is now expected to be completed by the first quarter of 2019, or 12 months ahead of the original schedule, without interior fittings and other finishing works completed.

Chuang’s Consortium International the builder of the house at 15 Gough Hill Road, said on Monday.

The deal will come at a discount of HK$70 million, or 3 per cent off the original price.

The price cut lowers the cost to HK$2.03 billion, raising speculation that the deal was caught in trouble.

In June 2016, Chen Hongtian, chairman of Cheung Kei Group, which invests in property, hotels and finance firms, agreed to pay a record HK$2.1 billion for the 9,212 square foot luxury house.

Under the original agreement, the buyer will pay 80 per cent, or HK$1.68 billion, in cash with the remaining 20 per cent to be paid by the transfer of Shenzhen property.

“The price cut is because I do not require the developer to provide fitting and finish work. I will do the decoration at my own cost,” Chen told the Post on Thursday.

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“I will pay the balance of the amount and complete the deal one year earlier than the previous arrangement. It is funny if the market still thinks that I’m in financial trouble.”

Asked why he preferred to complete one year ahead of the schedule, Chen said, “I would like to move in earlier.”

Chuang’s Consortium said it has received HK$1.05 billion, of which HK$420 million was by way of transfer of mainland properties as of November 26. The Shenzhen property comprises floors 1-3 of Peng Building, located on Wenjin North Road in the Luohu District of Shenzhen.

HK$2.1 billion Peak home purchase partly funded by Shenzhen property transfer

The purchaser will pay the balance of HK$980 million in cash within 30 days after receiving the vendor’s notification of the issuance of the government occupation permit, according to the amended agreement.

The builder expects the latest the completion will take place is in the first quarter 2019, instead of the first quarter of 2020.

Chen said he would spend more than HK$70 million decorating the house.

In a statement, Chuang’s said it could save an estimated HK$66.3 million by handing the house over without fitting and finish work.

It also expected to receive part of the balance of the payment HK$560 million about one year earlier.

The original contract was for the buyer to pay HK$420 million in cash within seven business days after Chuang’s issued the buyer a written notification of receiving the government’s occupation permit, and the remaining HK$630 million in cash upon completion in the first quarter of 2020.

Chen paid HK$4.5 billion for the East Tower of One HarbourGate at 18 Hung Luen Road, Kwun Tong, just a month after his company bought the luxury house on 15 Gough Hill Road.