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 million), 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.
Buying Two Luxury Sites in a Week
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.
The 9,196 square foot luxury site at 10 to 16 Pokfield Road acquired by Hongrongyuan this week is approved for construction of approximately 73,352 square feet of housing, which works out to a price of HK$25,000 per square foot, lower than the average unit price of around HK$33,000 per square feet along Pok Fu Lam Road in the same area.
Hongrongyuan One of Hong Kong’s Peak Spenders
The Lai family, which established privately-held Hongrongyuan in 1991, first made a splash in the Hong Kong market three years ago, when they paid HK$698 million to acquire House #6 at 28 Barker Road, at a unit price which worked out at HK$101,800 per square foot.
One year after buying their first piece of the Peak, according to an account in the Apple Daily, the Lai family acquired the six-unit Severn Villa just up the hill from Barker Road through a series of transactions which totalled HK$1.17 billion.