New houses on Hong Kong’s The Peak could fetch nine times the value of Buckingham Palace

Homebuyers might have to pay as much as nine times the value of Buckingham Palace, on a per square foot basis, for a house on Mansfield Road, in Hong Kong’s affluent The Peak district, according to an industry observer.

A government land parcel on The Peak could be about to set a new price benchmark for the city

“Almost all the most expensive homes in the world can be bought for a relative pittance – on a per square foot basis – compared with this,” said Carrie Law, chief executive of property portal Juwai.com. “This price range is nine times of what Buckingham Palace in London – home of the queen of England – would probably be worth on a per square foot basis.”

The palace, if it were on sale, could be worth US$2.87 billion, or HK$27,000 per sq ft, according to British property agency Foxtons.

The Mansfield Road site is expected to go for as much as HK$120,000 per sq ft, or HK$40 billion, and could yield a total gross floor area of 404,300 sq ft, according to global real estate services company Colliers International.

The sale comes amid rising interest rates and weakening sentiment, but developers are expected to pay a record-breaking price for the government land.

Houses built on the plot – now occupied by six towers of government quarters and to be tendered by the Hong Kong government next week – could be worth HK$250,000 per sq ft each, according to Vincent Cheung, the deputy managing director for Asia valuations and advisory services at Colliers International. An apartment complex on the site could sell for about HK$200,000 per sq ft.

At about HK$40 billion, the land could be the most valuable plot on record. “Although the land is expensive, companies will form partnerships to get it,” said Cheung, who added that such a large piece of land was unlikely to be available for sale at The Peak any more.