CK Asset Sells Mid-Levels Luxury Homes for $50M as High-End Market Hangs On

Two units on a high-level floor at CK Asset’s Mid-Levels luxury project sold last week for a combined HK$393.9 million ($50.1 million), showing the resilience of Hong Kong’s high-end housing market amid the COVID-led economic slowdown.

Hong Kong’s second-largest developer by market capitalisation on Friday sold Unit 6 on the 21st floor of 21 Borrett Road’s 26-storey tower for HK$190.1 million, reflecting a sale price of HK$87,648 per square foot, according to public records posted by the developer. Unit 7, an adjacent apartment on the same floor, sold that day for HK$203.8 million, equivalent to a per-square-foot price of HK$88,034.

The price tag for both homes was in line with previous sales on floors 16, 18 and 22 of the property from mid-2021 through January this year, said Alex Leung, senior director at surveying firm CHFT Advisory and Appraisal, who noted that the latest transactions were for high-zone units in the residential tower.

The developer has sold 32 units at the first phase of the project since February of last year, according to research from Savills Hong Kong. Excluding three transactions on the 23rd floor of the project — for which unit rates ran from HK$126,000 to HK$136,000 per square foot — the price for homes at 21 Borrett Road averaged HK$79,132 per square foot, the agency said.

Borrett Road Slowdown

The four-bedroom units that sold this month to undisclosed buyers are part of 21 Borrett Road’s first phase, comprising 115 units across three residential towers. With Unit 6 spanning 2,169 square feet (202 square metres) and the adjacent Unit 7 covering a saleable area of 2,316 square feet, the two apartments could be combined to create a super-sized luxury home, said Colliers’ head of valuation and advisory services Hannah Jeong.

Last week’s deals followed a lull in sales at the Mid-Levels project in the first quarter, when only two transactions totalling HK$334.6 million were recorded during the entire period.

This was a drop from 2021, when CK Asset had recorded three transactions in the first quarter alone, despite sales having begun just in February that year. The first of the three was a 3,378 square foot unit in a different building at the project that sold for HK$459 million, translating to HK$136,000 per square foot and breaking the record for Asia’s priciest apartment at the time.

With social distancing restrictions having begun to relax on 21 April, in-person home viewings have also resumed to normal, according to Cherrie Lai, senior director and head of residential sales for development and investment of prestige homes at Savills, which could make way for more home sales in Hong Kong.

“It is encouraging to see two units at 21 Borrett Road transacted at the right price only on the second weekend since viewing activity resumed,” she said.

Luxury Sales Slide

Sales in the luxury residential sector have been thin since the beginning of the year due to the fifth wave of COVID-19, Lai said.

Hong Kong’s latest outbreak led to dampened economic activity during the first three months of 2022, according to Keith Chan, director and head of research at Cushman & Wakefield Hong Kong, who said activity in the luxury residential sector “was no different”.

“According to the Land Registry, the number of sale and purchase agreements dropped from 1,213 cases in 2021 to 646 cases in 2022 during (January to April) for luxury residential properties with a consideration higher than HK$20 million,” Chan said.

Before Hong Kong was hit by its fifth COVID wave, luxury deals were still breaking records at the start of the year. In January, a unit on Victoria Peak at the Mount Nicholson project, developed by Wheelock Properties and Nan Fung Development, sold for HK$583.2 million to an unnamed buyer, making it the second most expensive home ever sold in Asia on a price per square foot basis.

With Hong Kong battling the fifth wave of the pandemic and amid growing geopolitical tensions, however, luxury home prices in the city slid as much as 2.7 percent in the first quarter, according to Savills.

Despite the current headwinds, with buyers from outside Hong Kong facing hurdles to luxury property purchases, two types of buyers continue to support demand in the high-end residential market: local high-net-worth individuals and wealthy mainland-born new Hongkongers who live in the city, said Cyrus Fong, senior director of valuation and advisory at Knight Frank.

“With the anticipated border opening between Hong Kong and China, it is possible that more mainland buyers would purchase luxury homes in Hong Kong, resulting in a slight rebound in the luxury housing market this year,” Fong said.