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Tycoon Lee Shau-kee’s Son Buys Hong Kong Site for $233 Million

The property at 35 Barker Road, purchased by Martin Lee
An undated handout photo shows the property at Hong Kong's Peak, purchased by Henderson Land Development Co. Vice Chairman Martin Lee. Source: Jones Lang LaSalle via Bloomberg

May 19 (Bloomberg) -- Martin Lee, the youngest son of Hong Kong real estate tycoon Lee Shau-kee, paid HK$1.82 billion ($233 million) for a site in the city’s most expensive residential area, signaling luxury home demand is withstanding government measures to avert a bubble.

Lee, who is vice chairman of Henderson Land Development Co., controlled by his father, offered a record HK$68,200 ($8,746) per square foot for the site at the Peak yesterday and said he will develop it for personal use. Auctioneer Joseph Tsang, head of sales at property broker Jones Lang LaSalle Inc., said the per-square-foot price for the 53,350 square foot (4,956 square meters) site was the highest ever at a Hong Kong public auction.

The price for 35 Barker Road beat analyst estimates that ranged from HK$1.2 billion to HK$1.3 billion, indicating demand for high-end sites is holding up even as Hong Kong introduces measures including raising stamp duties on luxury home deals to curb prices, and a government auction on May 11 fetched less than surveyors’ estimates. The Hang Seng Property Index, which tracks the city’s seven biggest developers, reversed a loss to close 0.8 percent higher after the auction.

“This is surprisingly positive, especially after the Tung Chung auction,” David Ng, a Hong Kong-based analyst at Royal Bank of Scotland Group Plc, said in a phone interview yesterday. “There is a bipolarization of the market -- the expensive homes are getting more expensive, while the cheaper ones are getting cheaper.”

An index of existing home prices in Hong Kong fell 1.02 percent as of May 9, the most in nine weeks, as sentiment was weakened by the measures to cool the property market and concerns that Europe’s debt crisis could stall a global economic recovery, Centaline Property Agency Ltd. said May 14.

The government has pledged to increase land supply, imposed limits on corporate purchases of flats and said it may extend increases in stamp duties.

‘Super Luxury Market’

“This shows that the outlook of the luxury market is still positive,” Jones Lang’s Tsang told reporters after the auction. “The super-luxury market isn’t affected by sentiment in the mass segment.” Luxury homes in Hong Kong refer to those costing more than HK$10 million each or bigger than 1,000 square feet.

On the Barker Road site is a five-story apartment building completed in 1981 comprising eight homes spanning about 3,300 square feet each, according to Jones Lang LaSalle. A developer can build only up to 26,675 square feet on the plot due to zoning plans, it said. It didn’t identify the seller.

All the leases on the Barker Road property will end Dec. 31, said Tsang, also international director at Jones Lang.

Lee, who was born in 1971 and is married with two daughters, said after the auction that he will develop the site for family use into villa-style housing.

Rare Site

Such a site on the Peak is very rare, has good views and is very hard to get, said Lee. Known also as Lee Ka Shing, he is also executive director of Henderson Land.

The price for the site per square foot exceeded the sellers’ expectations, Jones Lang’s Tsang said. He estimated that if the site was redeveloped and sold, it could fetch in excess of HK$100,000 per square foot.

Stamp duty on the Barker Road sale could cost HK$77.35 million. The Hong Kong government raised stamp duties on homes selling for more than HK$20 million to 4.25 percent from 3.75 percent in the fiscal year that began April 1.

Government Auction

The Barker Road auction contrasts with the government’s May 11 sale of a site in Tung Chung on Lantau island. The land, which could yield a maximum of 131,000 square meters (1.41 million square feet) of residences, was sold to Nan Fung Development Ltd., a privately held developer controlled by billionaire Chen Din Hwa, for HK$3.42 billion, against a median HK$4.75 billion median estimate of three surveyors.

Yesterday’s auction could serve as an indicator for a government sale of another site on the Peak on July 28, analysts including Ng said. The 2.33-hectare site (250,930 square feet) at 103 Mount Nicholson Road could be sold for HK$7 billion, Savills Plc said yesterday.

Henderson Land will study taking part in the next three government auctions, Martin Lee said yesterday. The government, which owns most land for development in Hong Kong, will hold auctions on May 24, June 8 and July 28, according to the Lands Department.

Still, Jones Lang’s Tsang said on a per-square-foot basis, Mount Nicholson is unlikely to exceed Barker Road’s price as that means the winning bidder would have to build many apartments to make a profit.

Lee Shau-kee, 82, was ranked by Forbes Magazine in March as Hong Kong’s second-richest man behind Li Ka-shing, with an estimated $18.5 billion in wealth.

To contact the reporter on this story: Chia-Peck Wong in Hong Kong at

To contact the editor responsible for this story: Andreea Papuc at

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