A Hong Kong-listed construction company is buying a newly completed apartment building in Kowloon for HK$820 million ($104.8 million), from Guangzhou-based Yuexiu Property, even as Hong Kong’s housing market has begun to show signs of cooling over the summer.
Grand Ming Group is buying the 39,420 square foot (3,662 square metre) building property in the Ho Man Tin area of central Kowloon with the hope of diversifying into real estate development according to a recent announcement to the Hong Kong exchange.
The Kowloon project purchase comes just over one year after Grand Ming, which listed on the Hong Kong exchange in 2013, bought a site on Sai Shan Road in the New Territories. A statement on the company’s website indicates that the firm intends to continue building a supply of sites in the city.
Building Contractor Grabs a Kowloon Apartment Block
Grand Ming’s new building at 279 Prince Edward Road West has 18 apartment units ranging from 1,300 to 2,700 square feet (121 to 251 square metres), and is located about 1.3 kilometres east of the Prince Edward MTR station, in an upscale residential neighbourhood of central Kowloon.
“The Acquisition presents an excellent opportunity for the Group to acquire high quality properties which is located in the established luxury district of Kowloon and in the neighourhood of well-known primary and secondary schools,” Grand Ming explained in the announcement.
The Ho Man Tin area, historically a hub for expats, offers a desired education system including the Stamford American School which is scheduled to open this month.
Ming Group Diversifies into Hong Kong’s Hot Housing Market
Founded in 1995, the Kowloon-headquartered group specialises in the construction of residential, commercial and data centre properties, and has also branched out into office and data centre leasing. Through the Ho Man Tin deal, Grand Ming continues a move into property investment and development that began in May 2016 when the company paid HK$938.88 at a government auction for a plot on Sai Shan Road on Tsing Yi Island, where it plans to build an 800-unit residential project with a gross floor area of around 400,000 square feet (37,161 square metres).
Home prices in Hong Kong have risen by 24 percent since April 2016, prompting developers to step up the pace of new project launches. Up to 98,000 new flats are projected to hit the market over the next three to four years, according to data from the city’s Transport & Housing Bureau cited by the South China Morning Post. The market is showing signs of stabilising, however, as the monthly home price index, which tracks pre-owned home sales, rose by its slowest pace in 16 months in July.
Mainland-Focussed Yuexiu Sheds a Hong Kong Asset
The new building in Ho Man Tin is the product of a redevelopment effort started in September 2013 by Yuexiu, which consolidated ownership of the former building’s residential units the previous year. In an apparently unrelated transaction on Thursday, Yuexiu shifted a 35,903 square metre hotel in the Conghua district of Guangzhou from one subsidiary to another for RMB 199.2 million ($30.4 million).
Hong Kong is not a focus for Yuexiu, which had around 73,400 square metres in gross floor area under development in the city, or 0.5 percent of the group’s total development portfolio, as of 2016 according to its annual report. Yuexiu has developed over 100 residential and commercial properties to date including the 432-metre-tall Guangzhou International Finance Center, and has sold a total floor area of over 10 million square metres.