Sun Hung Kai Properties backtracks, says no need to cut annual sale target

Sun Hung Kai Properties (SHKP) said it may not need to cut in its annual sale target by as much as 15 per cent this year, having generated HK$15 billion in contract sales so far this year, or slightly less than half its full year target.

In February, SHKP said it might cut its HK$32 billion sales target by 10 to 15 per cent this year because of global economic headwinds.

Victor Lui Ting, deputy managing director at SHKP said the company plans to release six to eight new projects to market in the second half.

Its upcoming new project, Park Yoho, in Yuen Long, will be on the market within one to two weeks, he said on Thursday.

Other projects in the pipeline include developements in Tuen Mun, west Mid-Levels, Shau Kei Wan, Shamshuipo and North Point.

International property consultant JLL expects developers to face increased competition.

The number of residential units pending pre-sale consent in April surged 29.4 per cent month-on-month to 12,937, the highest level in seven months, JLL said.

JLL estimates that the average private housing supply between 2016 and 2019 should reach 18,700 completed units per year, about 68 per cent higher than the annual average of 11,200 completed units during the last 10 years.

“With new housing supply set to increase in the next few months, developers would continue to offer aggressive financing schemes and launch new projects at competitive prices. This will ultimately put pressure on prices in the secondary market,” said Henry Mok, a director at JLL.

More owners can be expected to offer their flats at steeper discounts ahead of a pivotal US interest rate decision in June.

A case in point is a 1,129 square foot unit at Grand Promenade in Sai Wan Ho sold for HK$25 million, about HK$5 million lower than the original asking price.

Separately, US banking group Citi will reduce the size of office space it leases in Central by 80,000 square feet when the current expires next month.

The bank said it would relocate its offices in Central, Tsim Sha Tsui and Hung Hom to its nearly acquired office building in Kwun Tong, which is scheduled to be delivered early next year.

The relocation will help the bank save HK$91.2 million.

Citi paid HK$5.42 billion to buy 512,000 square-foot One Bay East, currently still under construction, in Kwun Tong in 2014.