Kerry Defies Hong Kong Luxury Slump to Sell Kowloon Villa for $64M

Kerry Properties is realising some rich returns from a bet on Hong Kong’s high-end Beacon Hill neighbourhood, having agreed to sell a detached home at its Mont Rouge residential project for HK$508 million ($64.7 million), according to transaction records posted by the developer.

An undisclosed buyer is picking up the 7,171 square foot (666 square metre) home this week, with the transaction price marking a record high for the project, and for new luxury homes in Kowloon, since Hong Kong rolled out market cooling measures in 2013, local media reported.

Kerry Properties is selling Villa 1 in its 9 Lung Kui Road project for approximately HK$70,840 per square foot of saleable area, more than four times above the average selling price for homes in Beacon Hill during September, showing the enduring appeal of superluxury residences in Hong Kong despite slower sales across the high-end segment during the first half of the year.

Upon completion of its latest sale, Kerry will have sold a total of nine new homes at Mont Rouge for a combined HK$1.53 billion, since the beginning of the year, with the sale of Villa 1 breaking price records despite analysts predicting a slide of up to 5 percent in Hong Kong luxury home prices for the full year of 2022.

Kowloon Luxury

The four-storey house is the largest and last of five detached homes to be offered for sale at Kerry’s Mont Rouge project and features a private garden and a separate driveway connecting to the development’s entrance. In addition to the villas, Mont Rouge also includes 14 townhouse units and 26 flats across a pair of residential towers.

Homes in the project, excluding the villas, attached homes and top-floor units of the residential towers, have been selling for an average of approximately HK$48,000 per square foot, according to Alex Leung, senior director at CHFT Advisory and Appraisal. The average per-square-foot price for units sold across the project is HK$57,000, Leung added.

Homes at nearby residential developments such as Ayton in Kowloon Tong, completed in 2019 by developer Easyknit International, sell for about HK$35,000 per square foot, said Leung.

Located in Kowloon Tong, the Beacon Hill neighbourhood is a traditional luxury district. In October last year, a government tender for a residential site in the area drew bids from 17 builders, including Lai Sun Development, CK Asset and Wheelock Properties. Lai Sun won the tender for the 71,592 square foot residential project at 79 Broadcast Drive with a bid of HK$1.6 billion.

Kerry Raising Cash

Kerry’s Mont Rouge sale comes in the middle of a luxury decline which saw sales of residential units of 100 square metres (1,076 square feet) or more fall to just 820 units in the first six months of 2022, which marked a slide of 34 percent down from the 1,250 deals recorded in the same segment last year, according to Leung.

In the six months which ended 30 June, Kerry Properties, controlled by the Kuok family of Shangri-La Hotels, recorded consolidated revenue of HK$4.64 billion, which was down 27 percent from the same period a year earlier, the developer said in its 2022 interim report.

Over the same period, Kerry’s Hong Kong property division reported revenue of HK$1.98 billion, showing a year-on-year decline of 25 percent, and gross profit of HK$943 million, representing close to a 27 percent slide from the same period in 2021.

Despite the overall slide in Hong Kong revenues, since the city began recovering from the fifth wave of the pandemic in mid-April this year, Kerry Properties has moved to drive sales at its projects, including 10 LaSalle, La Marina and Mont Rouge, with contracted sales in the segment reaching HK$2.30 billion in the first half, which was up 13 percent from the same period in 2021.

Kerry has also been replenishing its development pipeline within the past year, having won a URA tender in Kowloon’s To Kwa Wan for HK$5.58 billion in December of 2021. The builder now holds the rights to develop as much as 443,785.2 square feet of new homes and retail space in the area.