A Hong Kong property owned by the family of tin-mining tycoon Loke Yew has been put up for sale, with offers predicted to reach up to HK$6 billion ($770 million), according to market sources.
The 68-year-old mansion, which is being sold for redevelopment as a super luxury residence, is expected to draw interest from mainland Chinese and Hong Kong investment consortiums attracted by the chance to buy a site in the world’s most expensive residential neighbourhood.
Located on a hilltop on the Peak and sharing a postcode with Hong Kong’s wealthiest residents, the property’s marketers will be looking for buyers at a time when luxury apartment transactions fell 25 percent year-on-year in the first half of 2019.
Exclusive Postcode Could Draw Investors
Zoned for residential use only, the site at 30, 34, 36 and 38 Magazine Gap Road is approved to be re-built as flats or houses with a maximum building height of three storeys including carports.
The maximum gross floor area permitted for redevelopment is 48,776 square feet, at a plot ratio 0.73, with a lease term of 150 years from 22 October 1888. Should the project sell for HK$6 billion, the new buyer would be paying the equivalent of over HK$123,000 per square foot of built space.
Known as Cameron Mansions, the set of four three-storey blocks have a commanding view of Victoria Harbour, and occupy a 66,650 square feet (6,192 square metres) site. The project is being marketed on behalf of the owners by Savills, who declined to comment on the potential sale.
Completed in 1951, the existing buildings are said to have been built on a memorial tower erected by the Japanese army during the second world war, which was destroyed by the British in 1947.
Super-Luxury Market Under Pressure
The property has invited speculation in local media that the eventual sale price will top the HK$5.9 billion that was paid for a Peak property last year.
Asif Ghafoor, chief executive officer and founder of Hong Kong property listings service Spacious.hk, said that a sale at such a record price would run contrary to market trends tracked by his company.
“We have seen the volume of enquiries for properties over HK$200 million fall 16.3 percent year-on-year, which is definitely out of the normal range,” he said, adding that it was very unlikely that a record price would be achieved given the downward pressure on the super-luxury end of the market.
Increased stamp duty imposed by the government in 2016, which make it harder for non-residents to buy property, have had a major impact on the super-luxury sector of the market, according to Ghafoor.
HK$5.9B Record Still Standing after 12 Months
The current record price for a residential property in Hong Kong, in terms of total consideration, dates back to July last year when a company controlled by directors of Shenzhen-based developer China Resources Land bought a site on the island’s south side overlooking Deep Water Bay.
The China Resources Land-linked company paid HK$5.9 billion for a residential property at 39 Shouson Hill Road, which came with permission to redevelop the site into almost 70,000 square feet of useable space, in a deal which translates into HK$84,286 per square foot of built area.
That transaction broke the previous record set in 2015 when a company understood to be connected to mainland property magnate Cheung Chung-kiu paid HK$5.1 billion for Ho Tung Gardens on the Peak.
That deal saw Chung-kiu’s company pay HK$82,258 per square foot of buildable area for the site, which had approval to be developed into as much as 62,000 square feet of housing.