Company - - Feb 25,2017
KWG Property Company and Logan Property Company finalize a land deal in Ap Lei Chau Island outbidding 13 other competitors including Sun Hung Kai Properties Ltd.
Two mainland China property firms finalized a piece of Hong Kong residential land at a record-breaking cost of $2.2 billion, signifying the territory's skyrocketing real estate prices.
Unicorn Bay Investments Limited, a unit of Guangzhou-based KWG Property Holding Company and Shenzhen-based Logan Property Holdings Company outbid Hong Kong’s largest real estate developer for a residential waterfront project at the highest price ever placed for a government land sale.
The Investment firm outbid 13 competitors including Sun Hung Kai Properties Ltd. And Cheung Kong Property Holdings Ltd. and jointly won the tender. However, some major local firms including Hopewell Holdings and Hang Lung Properties did not bid for the land deal.
The site in Ap Lei Chau Island is connected to Hong Kong Island by a bridge. This site is also expected to be connected by city’s extensive subway lines.
With a total land parcel floor area of 762,091 square foot, the price translates to about $ 2,847.5 per square foot, according to a calculation based on government data. The company is expected to sell apartments on the site for at least $ 4,252.05 per square foot in order to a sustainable profit.
Mainland Chinese real-estate developers have been aggressively purchasing land in Hong Kong, which accounts for about 29 percent of the land sold in 2015-2016 in Hong Kong.
Hong Kong's Financial Secretary, Paul Chan, said earlier that the city's skyrocketing property prices continues to be an issue. However, competition from Chinese real estate developers is not an issue for Hong Kong. Hong Kong is a free market economy that welcomes healthy competition from abroad.