Super prime highrises popular

By New Straits Times

Spanking new super-prime highrise apartments are red hot buys in Hong Kong, thanks to the scarcity of such units in its luxury residential districts.

This is why a unit in the Lodgeon- the-Park project in Mid-levels managed to sell for a mind-blowing HK$1 billion (RM455 million), or HK$11,091psf (RM5,046psf). And in The Legend in Jardine's Lookout tower, a penthouse named "King of the House" was sold in March for HK$128 million (RM58.24 million) or HK$33,300psf (RM15,152psf).

CB Richard Ellis (CBRE) Hong Kong managing director Rick Santos said in the international real estate services report for the first half of 2007 that high-end luxury residential units are being highly sought-after by investors as well as end users who have made huge profits from the stock market.

Developers are frantically trying to diffuse - as well as cash in on - the demand by acquiring land suitable for upscale living.

One of their purchases was a site in Tai Po opened by the HK government that fetched a record HK$6,109psf (RM2,780psf).

In the commercial arena, Santos said in view of the shortage of prime Grade A office stock in HK, foreign institutional funds have widened the scope of assets they would consider acquiring to include not only office space but retail properties in secondtier locations as well.

Among recent purchases was the Mong Kok Computer Centre by Singapore-based Alpha Partners Investment, a property fund of Keppel Land, for HK$750 million (RM341.25 million) or HK$28,846psf (RM13,125psf).

Nevertheless, Santos said the star attraction remains prime office space, due to the escalation in rental and sale values by 10.2 per cent and six per cent respectively in the first half of the year.

Driven by persistent demand from banking and hedge fund tenants for prestigious office space in Central, he said 5,000sq ft in the Two IFC building was rented for a record HK$170psf (RM77.35psf).

Such signings have given foreign companies such as Citigroup Property Investors the confidence to buy two towers of Crocodile House and the adjacent Ananda Tower in Central for HK$1.5 billion (RM682.5 million) for redevelopment purposes.

Santos said he expects the office rental market to be further boosted by the large number of public companies slated for flotation in HK.

In the retail segment, CBRE said supply in the current year comes mainly from three new shopping malls: MegaBox and EMax in Kowloon Bay and Elements at Kowloon Station of the Airport Express.

The first half-year also saw international brands open flagship stores in HK, some with multi-levels located in prime areas.

On the industrial front, it said the launch of the HK-Shenzhen Western Corridor is expected to make a significant impact on the logistics industry and HK's industrial properties.