The US government has sold a set of consular residences in Hong Kong’s southern District to Hang Lung Properties for HK$2.6 billion.

Under its current permits, the nearly 95,000 square foot (8,800 square metre) site can yield up to 47,397 square feet of gross floor area, bringing the Hong Kong-listed builder’s purchase to around HK$54,138 per square foot.

That price is 37% less than China Resources Land paid to acquire a neighbouring project (16A-16D Shouson Hill Road) in 2018.

A Hang Lung spokesperson referred to the price for the “rare and premium land lot”, as “reasonable,” arguing the purchase was a vote of confidence in Hong Kong’s future.

“The land will be redeveloped into luxurious detached houses, targeted for completion by 2024,” Hang Lung said, with the company estimating that its total investment in the project will be approximately HK$4 billion.

At the time it was put on the market in June via a public tender managed by CBRE, Vincorn Consulting and Appraisal estimated the site’s value at from HK$3.1 to HK$3.5 billion.

The US government bought the land in June 1948, when Hong Kong was still a British colony, for an unknown price, according to Land Registry records. 

Luxury property is having a rough go of it in 2020. In their latest report, Knight Frank attributed falling asset values and declining transaction volumes in Hong Kong to COVID-19, adding that prices were likely to drop another 5% this year on top of the 10% that they have slipped since 2019.

Source: Mingtiandi