A land parcel in Hong Kong’s most expensive residential area was sold for US$1.33 billion or HK$10.4 billion in a government land auction yesterday, boosting one of the world’s luxury property markets.
Unlisted property developer Nan Fung Group offered the highest bid for the residential site on Victoria Peak, which has panoramic views of Victoria Harbour and housed the former government headquarters.
The price of the land parcel was within market expectations, but it failed to hit the top ceiling set by forecasts, suggesting that the government’s measures to curb property prices in the city-state may have affected the price.
The 2.3-hectare land parcel has a maximum gross floor area of approximately 325,000 sq ft, and Nan Fung Group said it will jointly develop the site with developer Wharf Holdings.
The selling price of a developed property on the site is expected to reach US$4,900 psf.
Several analysts said that the auction result sets a direction for where the prices of Hong Kong luxury properties are headed, but they noted that the winning bid failed to hit the US$1.46-billion market expectation.
"The market has decided the price today. And it doesn’t matter what some people think it would sell for, more important what did it sell for," said Graham Ross, a government auctioneer.
Releasing more land sites for sale is part of the government’s effort to curb Hong Kong’s overheating property prices, which have increased more than 30 percent since 2009.