Auctioneer James Cheung (standing), a director at Centaline Surveyors, waits for higher bids Thursday for 11 luxury apartments owned by the Government Property Agency. Provided to China Daily

Dealers say many mainland buyers are interested in HK's prestigious addresses

With the luxury home market now booming, the Government Property Agency and a private owner have joined the run and placed their luxury properties for sale.

On Wednesday the Hong Kong government auctioned a prime residential site on the Peak for HK$10.4 billion, a sky-high unit price of HK$32,000 per square foot of gross floor area. That apparently stoked the already red-hot luxury property market.

Taking advantage of latest developments, the Shang Chi Shi family, who owns the luxury property at 20 Peak Road, is trying to sell it via a public tender held simultaneously in Hong Kong and on the mainland. This information was revealed to the media on Thursday by property consulting firm Jones Lang LaSalle, the sole agent appointed for 20 Peak Road.

The site in question covers approximately 25,764 square feet, but the future property developed at 20 Peak Road can have a maximum total gross floor area of 12,882 square feet.

Joseph Tsang, International Director and head of Capital Markets at Jones Lang LaSalle, told reporters that many prospective mainland buyers have expressed interest in buying the property.

Home supply in the area is limited, so Tsang predicts that bidding for the site will be competitive.

According to data from Jones Lang LaSalle, prices of individual houses on the Peak have risen by nearly 2.3 times in the last 10 years, a significantly higher rise than that observed in the price of apartments.

On the same day the Government Property Agency auctioned nine luxury residential flats, making a HK$226.1 million profit.

The government had initially planned to sell 11 luxury residential flats, but it did not sell the two that had smaller panoramic views and less appealing floors.

The 11 flats are all located in Hong Kong's prime districts.

"I am bullish about the local luxury property market, as there is ample liquidity in the economy. I am particularly bullish on the luxury flats on Hong Kong Island," said a buyer, identified only by his last name Cheng, after he had signed a sales contract.

The sole agent for the auction, Centaline Surveyors, said that the favorable result of Wednesday's land auction has fuelled market sentiment for the luxury home market.

"Bidding is fierce for any good quality apartment. Although market sentiment is bullish, property buyers take prudence when they bid. We can see this from the failed auction for the two flats," said James Cheung, director of Centaline Surveyors. He suggested that the smaller panoramic views of the two flats that did not sell could indeed be the reason for their failed auction.

China Daily

(HK Edition 07/30/2010 page3)