CK Property’s Harbour Glory project sets new price record for Hong Kong Island East

Cheung Kong Property (Holdings), undeterred by mounting pressure on the government to roll out tougher cooling measures, is to offer its residential project in North Point at a record price for Hong Kong Island’s East district.

The developer announced on Monday that the first batch of 76 apartments at Harbour Glory, ranging in size from 432 square feet to 1,595 sq ft, would go on sale for HK$10.3 million to HK$64.2 million, or HK$23,600 to HK$40,255 per sq ft after a discount of as much as 34 per cent.

The most expensive is a 1,595 square foot unit on the 20th floor, with a full sea view of Victoria Harbour, costing HK$97.28 million, or HK$60,993 per sq ft. But the price will come down to HK$64.2 million, or HK$40,255 per sq ft, after factoring in the 34 per cent discount.

“The discounted price will still be a record for Island East,” said Sammy Po, chief executive of Midland Realty’s residential department.

The price is even higher than a 2,123 sq ft unit on the 20th floor of the luxury Mid-Levels residential development, 39 Conduit Road, which changed hands for HK$76.7 million, or HK$36,132 per sq ft on March 28, according to the Centaline Property Agency website.

The cheapest Harbour Glory flat is a 437 sq ft one-bedroom unit on the 8th floor, with a view of Electric Road market, which is being offered for HK$10.3 million, or HK$23,600 per sq ft after discount.

The launch comes as the government is being urged to plug a loophole in the tax regime after a sharp rise in the number of first-time buyers purchasing multiple properties in one go to avoid paying a levy.

The existing tax ordinance ­collects stamp duty based on the total value of each sales agreement.

So, for a single instrument involving multiple residential properties, the Inland Revenue Department regards those units as a single transaction.

On Friday, the Hong Kong Monetary Authority asked banks to exercise caution when dealing with mortgage applicants planning to buy several units in a single transaction.

Thomas Lam, a director at Knight Frank, said only 10 per cent of the 100,000 new flats due to come online between 2017 and 2020 will be on Hong Kong Island.

“There is no doubt developers will offer the projects at high prices as no supply of new waterfront developments has been put on sale in North Point for many years,” he said.

He described the steep discount being offered by CK Property as a “kind of marketing gimmick”, designed to grab the attention of prospective buyers.

Po believes the developer will raise prices in subsequent batches of the 378-unit Harbour Glory project and eventually aim to achieve transaction prices as high as HK$60,000 per sq ft.

In August 2011, CK Property won the residential site through government tender for HK$6.26 billion, or HK$8,294 per sq ft.

Lam estimates the total development cost of Harbour Glory could be HK$15,000 to HK$16,000 per sq ft. That would make the average offer price for Harbour Glory flats 90 per cent higher than the development cost - a handsome profit margin for the developer.

Justin Chiu Kwok-hung, executive director at CK Property, sees some room for increasing the prices of the next batch of apartments.

He said the first batch would generate HK$2.35 billion in sales revenue if all the units sell at their discounted prices.

Chiu confirmed that he bought a 1,948 sq ft unit on the 19th floor at The Albany, Mid-Levels, for HK$94.3 million under his own name.

Meanwhile, Sun Hung Kai Properties is due to release another 152 units at its Cullinan West development atop Nam Cheong Station for sale on Friday.