Entrance of 28 Peak Road (Image: Google Maps)
A mansion in Hong Kong’s prestigious Peak area once owned by local investor Ho Shung-Pun has been sold by creditors, marking the third piece of Ho’s property portfolio to be offloaded in three months as the indebted investor continues to face liquidity challenges.
An unnamed buyer has purchased the home at 28 Peak Road for over HK$1 billion ($129 million), or HK$112,233 per square foot, market sources confirmed to Mingtiandi. The transaction comes after Ho and his family in August sold a trio of mansions at 99, 101, and 103 Peak Road. A month earlier the Ho clan had sold a set of four luxury homes at 46 Plantation Road, with combined proceeds from the three disposals amounting to HK$2.9 billion.
The disposals by Ho, a former mathematics professor at Hong Kong Polytechnic University whose family founded local developer Kowloon Investment Co Ltd, comes amid a recent uptick in distressed sales in Hong Kong’s ultra luxury residential market, with transactions in the three months through 31 July taking place at nearly half of their valuations just a few years earlier, according to an August report by Savills.
“The high-end residential sector has been experiencing significant upheaval, with distressed sales dominating the ultra-luxury property market, especially in the prestigious Peak area,” Savills said. “These transactions have seen dramatic price reductions, averaging 46 percent below their Covid-era valuations, which has finally enticed opportunistic buyers into the market. This sharp decline in prices has been largely attributed to several instances of distressed sales, where property owners were compelled to sell to settle outstanding debts. A notable example is the HK$1.1 billion sale of Houses A to D at 46 Plantation Road.”
Down From the Peak
Situated on a 16,700 square foot plot, the detached house has a saleable area of 8,910 square feet (828 square metres) across two storeys and a basement level, and features six bedrooms, a garden, a swimming pool, and a parking garage. The Ho family purchased the home for HK$154 million in 2002, according to local media.
Ho Shung-Pun
In August, Ho’s family sold 99, 101, and 103 Peak Road, located 2 kilometers (1.2 miles) from 28 Peak Road, for HK$828 million ($57,676 per square foot), with the buyer said to be Stephan Horst Pudwill, vice chairman of HKEX-listed power tools maker Techtronic Industries. Pudwill was a tenant in one of the three houses, which collectively measure 14,356 square feet in saleable area.
That disposal came a month after Ho sold units A, B, C and D at 46 Plantation Road, also located in the Peak area, to local smartphone touchscreen tycoon Yeung Kin-Man for HK$1.1 billion (HK$64,759 per square foot), with that price marking a 50 percent decline from the height of the market in 2021 according to Savills, which brokered the transaction.
The sale of the mansions at 46 Plantation Road was triggered by Ho’s failure to make payments on a HK$1.6 billion loan provided by Hong Kong-based private equity firm Gaw Capital Partners, market sources told Mingtiandi. Set to be due in January 2025, the loan carried an interest rate in the “teens” and was collateralised against the units, according to the South China Morning Post.
31% Interest Rate
The sale of 28 Peak Road comes as Ho and a relative on Monday took out a HK$100 million, one-year loan from X8 Finance, a unit of HKEX-listed money lender and property investor Zero Fintech Group (formerly known as Termbray Industries International). The loan carries an interest rate of 31 percent per annum for the first and second months and 21 percent per annum thereafter.
The loan will be partially used to settle the outstanding principal and interest on a HK$85 million, one-year loan Ho and the relative borrowed from X8 Finance in January. That loan carried an interest rate of 29 percent per annum for the first and second months and 18 percent per annum thereafter, and was collateralised against two floors of a residential property and garage space owned by Ho.
Ho also took out a HK$44 million, one-year loan from X8 Finance in June 2023, with that debt carrying an interest rate of 25 percent in the first month and 13 percent thereafter.
Ho, who is in his 80s, continues to serve as a director of Kowloon Investment, which developed the Portofino luxury apartment project in Hong Kong’s Clear Water Bay area, and owns the 13-storey Kowloon Investment Building commercial block in Mong Kok.
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