Shenzhen developer spends hk$4.8b buying pair of hong kong luxury sites

The owners of Shenzhen real estate developer Hongrongyuan Property Group have reportedly acquired a luxury residential site five minutes walk from billionaire Jack Ma’s home near Hong Kong’s Victoria Peak for HK$3 billion ($384.6), according to local media accounts.

The site at 37 Barker Road is one of two purchases by the controlling shareholders in the top 10 Shenzhen home builder which were revealed last week in information filed with the city’s Land Registry, alongside a HK$1.8 billion purchase of a plot on Pokfield Road in the western Mid-Levels.

According to information now recorded with the Land Registry, the two sites are owned by Tat Ming Investment Company Limited, whose whose ownership was transferred in the updated filing, with the company’s directors now listed as Hongrongyuan founder Lai Haimin, his wife Chen Siting and his son Lai Junlin.

The pair of Hong Kong luxury acquisitions come after Hongrongyuan previously bought a villa at the Peak in 2016 and a unit in CK Asset’s 28 Barker Road in 2015. The deals follow soon after China Resources Land, which is also Shenzhen-based purchased 39 Shouson Hill in southern Hong Kong island for HK$5.9 billion just over one month ago.

Hongrongyuan’s newly-acquired site at Barker Road is a 20,400-square-foot multi-storey residential plot with a total construction area of 25,000 square feet. The 12 units in the 33-year-old building have been used for long-term rental housing, with individual units leasing for around HK$95,000 per month.

At the acquisition price of HK$3 billion, Hongrongyuan is expected to charge a world record of HK$300,000 per square foot for new homes to be built on the site to achieve a reasonable profit, said the United Daily News. That rate comes to 2.7 times the average price in the area in July of this year of HK$79,383 per square foot.

According to local media, the Shenzhen developer intends to increase the plot ratio when it redevelops the building, however, market sources familiar with the transaction told Mingtiandi that the existing structure on the site already exceeds planning guidelines for the location.

Ref : Property Report