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Undeveloped 1.3 acres in Hong Kong sells for $935M

Consortium led by Wharf Holdings buys property from government

The Hong Kong parcel sold for around $6,451 per square foot. (Getty)
The Hong Kong parcel sold for around $6,451 per square foot. (Getty)

 

Wharf Holdings led a consortium of investors on a record-breaking land purchase that shows just how confident some developers are in Hong Kong’s market.

The group paid the Hong Kong government the equivalent of $935 million for just 1.25 acres of land in the desirable Peak neighborhood, according to Bloomberg.

At around $6,451 per square foot, it’s the most ever paid for a government-owned residential property. The site is zoned for about 145,000 square feet of floor area.

Wharf’s consortium includes an entity owned by Sino Land Co. Chairman Robert Ng, CC Land Holdings’ Cheung Chung Kiu, Chinese Estates Holdings’ Chan Hoi Wan and her brother-in-law Thomas Lau, according to Bloomberg.

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Midland IC&I previously valued the property at the equivalent of $877 million. The consortium beat out at least four other bidders.

The deal is a clear indication that developers are confident in the future of the luxury residential market, despite the current slump. Luxury home prices dropped 8 percent last year compared to a 1 percent decline for mass-market properties.

Hong Kong is one of the most expensive property markets in the world, but it started slowing in 2018 after years of unsustainable growth. Civil unrest and the coronavirus pandemic are also putting downward pressure on the market.

Rents on Hong Kong’s top retail stretches hit a 12-year-low in the first quarter of 2020. The market for office space is also weakening.

[Bloomberg] — Dennis Lynch