Sept. 17 (Bloomberg) -- Sun Hung Kai Properties Ltd., the world’s largest developer by market value, raised the price of two penthouses in Hong Kong by 50 percent to a record HK$75,000 ($9,700) a square foot as demand surges for luxury apartments.

The units will be offered for HK$300 million ($39 million) each, said Victor Lui, executive director of the company’s real- estate broker. They each have 4,000 square feet (372 square meters) on three floors, an outdoor garden and a swimming pool.

The number of sales and purchase agreements on Hong Kong homes worth at least HK$10 million more than tripled to 500 in August from a year earlier, according to the Land Registry. Luxury homes in the city have appreciated by 30 percent this year, Centaline Property Agency Ltd. estimates, driven higher by gains in the Hong Kong and China stock markets and record-low mortgage costs.

“The buyers will most probably be ultra-rich mainland Chinese who like the location,” Margaret Ng, senior director of client development and research at CB Richard Ellis Group Inc. in Hong Kong, said by telephone.

The Sun Hung Kai apartments’ price in relation to floor area make them the world’s second most expensive homes by that measure, trailing a penthouse in Monaco that was priced at the equivalent of HK$100,000 per square foot earlier this year, said Knight Frank head of research Xavier Wong.

The properties, the biggest at the Cullinan development in the Kowloon district, were priced at HK$50,000 a square foot when Sun Hung Kai started selling units at the project in February. The Cullinan has 825 units and at 270 meters (886 feet) will be Hong Kong’s tallest residential building.

Shares Rise

Sun Hung Kai rose 3.3 percent to HK$116.70 at the close of Hong Kong trading. The developer has surged 81 percent this year, outperforming the Hang Seng Index.

Prices for high-end homes in Hong Kong will probably rise by 5 percent for the rest of the year and 18 percent in 2010, Knight Frank’s Wong said.

“The number of mainland tycoons is increasing rapidly in tandem with China’s rising economic prowess, and many of them would like to buy a premium residential unit in Hong Kong,” Wong added. “Sun Hung Kai understands that luxury homes in Hong Kong are in short supply and demand from the North is rising fast.”

Equity Market Gains

Hong Kong’s yearlong recession ended last quarter, when a rebound in exports to China helped the economy grow 3.3 percent from the previous three months. Wealthy buyers from mainland China have been “buoyed by gains in the equity market,” Yuwa Hedrick-Wong, an economic adviser for MasterCard Inc., said by e-mail.

“Hong Kong’s high-end property market is closely affected by demand from the affluent of mainland China,” Hedrick-Wong said.

Mainland Chinese buyers accounted for between 20 percent and 30 percent of the almost 400 units sold at the Cullinan, according to Sun Hung Kai’s Lui.

The Shanghai Composite Index rose 59 percent in the last 12 months, making it the world’s best-performing benchmark globally a year after the collapse of Lehman Brothers Holdings Inc. sparked a credit crunch. Hong Kong’s Hang Seng Index has gained 23 percent in the same period and is up 51 percent this year.

Bel-Air, Severn 8

A one-bedroom apartment in the Kowloon district was bought by a local businessman for HK$30,025 a square foot, a record for properties of that type in Hong Kong, Centaline, one of the city’s biggest property brokers, said Sept. 15.

The highest price paid for a luxury property in the city in August was HK$212.9 million in PCCW Ltd.’s Bel-Air project in Pokfulam district, Centaline said in a report this week.

Hong Kong’s record price for a luxury home was for a house in Sun Hung Kai’s Severn 8 project on the Peak that sold in the first half of 2008 for almost HK$56,000 a square foot.

Sun Hung Kai doesn’t anticipate the higher price at Cullinan will turn off prospective purchasers.

“We’re in negotiations with interested buyers, some of whom wanted alterations,” Lui said. “They are receptive (to the price increase) considering the luxury sector has outperformed” the property market as a whole in Hong Kong.

To contact the reporters on this story: Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net; Frank Longid in Hong Kong at flongid@bloomberg.net.

Last Updated: September 17, 2009 04:59 EDT