Cheung Kong Lures H.K. Buyers With Discount as Supply RisesMichelle Yun
Cheung Kong Holdings Ltd., the Hong Kong builder controlled by Asia’s richest man, is offering as much as 16 percent discount at its latest residential project in the city as developers accelerate sales this year.
City Point, the company’s biggest Hong Kong housing project in two years, will sell 350 of a total 1,717 units in the first batch, the company said yesterday. After discounts, the flats in the estate developed jointly with Nan Fung Development Ltd. in the Tsuen Wan district, range from HK$7,634 ($984) per square foot to HK$12,071 per square foot.
Developers including Cheung Kong and Sun Hung Kai Properties Ltd. are competing for buyers in the world’s most-expensive housing market as the government’s curbing measures cooled prices and transaction volume. Prices, which Barclays Plc forecasts will drop at least 30 percent by 2016, are also under pressure from increasing supply in coming years.
“Cheung Kong is sitting on the most available-for-sale units so its strategy is very important for the market,” said Alfred Lau, an analyst at Bocom International Holdings Co. in Hong Kong. The discount at City Point “is not a severe price cut, so it seems they’re not going for volume, which puts less pressure on the pricing.”
The shares fell 0.8 percent to HK$133.50 at the close of trading in Hong Kong. The benchmark Hang Seng Index advanced 0.1 percent.
Cheung Kong will sell 800 units at City Point this year, Executive Director Justin Chiu told reporters yesterday in Hong Kong, adding that the company is confident it can reach its 2014 sales target.
“Our flats are at a significant discount to the market and priced quite competitively,” Chiu said, adding that the first batch at City Point is more than 10 percent cheaper than recent transactions at neighboring estates.
Sales at City Point may also benefit from an adjustment in the double stamp duty, which extends the time local buyers have to sell their existing homes to qualify for a refund of the additional tax. The tweak is a technical adjustment and doesn’t signify relaxation of property curbs, K.C. Chan, Hong Kong’s secretary for financial services and treasury, said last week.
The government may consider adjusting some of the property curbs after the supply and demand in the real estate market returns to normal, Hong Kong Chief Executive Leung Chun-ying told lawmakers yesterday.
Developers may release 15,000 units for sale this year, from 9,753 units last year, an 18-year low, according to realtor Centaline Property Agency Ltd.
Cheung Kong Chairman Li Ka-shing has a net worth of $32.5 billion and is ranked the richest in Asia and 17th globally, according to the Bloomberg Billionaires Index.