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1.
SHKP pays $1.2b for Southside Villa
1. SHKP pays $1.2b for Southside Villa
ERNEST
KONG, SCMP 25 June 2005
Sun Hung Kai
Properties has splashed out $1.2 billion for a low-rise apartment
project on Shouson Hill Road belonging to the family of Ho Sin-hang,
one of the founders of Hang Seng Bank.
The company
plans to redevelop the 42-apartment Southside Villa into about 30
semi-detached townhouses, according to Victor Lui Ting, executive
director of SHKP's sales and marketing arm, Sun Hung Kai Real Estate
Agency.
The acquisition
cost of the site works out at about $13,000 per square foot, with
development costs for the 100,000 sq ft project estimated at $5,000
per square foot, said Mr Lui.
He added that
the development cost was similar to that of the firm's luxury project,
37 Severn Road, on the Peak.
Real estate
agents said the acquisition price reflected the developer's bullish
view of the luxury residential sector, as it is similar to secondary
transactions for townhouses in the same area.
"The site's
size is attractive. Luxury sites are in quite rare supply at the
moment and the location is very accessible too," said Mr Lui,
adding that a luxury site of this size was not available on the
application list for land sales.
"The market
is only taking a breather at the moment, with interest rate rises
expected to peak within the third quarter," he said.
The nine-year-old
project is 90 per cent leased, some leases for a duration of two
years, Mr Lui said, adding that construction work would begin only
when all the tenants had moved out.
"We haven't
fixed a date yet. We are taking it slowly," he said, adding
that he was optimistic about the luxury sector because of the relatively
short supply.
According to
real estate agents, the tender for Southside Villa also attracted
bids from developers such as Cheung Kong (Holdings), Sino Land and
Nan Fung Development.
SHKP has been
aggressively replenishing its land bank recently.
Last October,
the firm acquired a 136,000 sq ft site that housed the former San
Po Kong magistrates court building for $4.7 billion - 56 per cent
above the opening bid of $3 billion at auction.
At the same
auction, Cheung Kong outbid SHKP for a 191,126 sq ft residential
site that used to be police officers' quarters for $9.42 billion.
The price paid was 87.6 per cent higher than the starting bid.
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